tag:blogger.com,1999:blog-233592702024-02-20T23:46:46.165-05:00Small Cap StrategistSmall Cap Strategist is published by Crystal Equity Research an independent research resource on small capitalization stocks. Follow along as we discuss the most recent trends in the small-cap sector, investigate interesting companies and pan a few not-so-promising stocks.Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.comBlogger656125tag:blogger.com,1999:blog-23359270.post-54502525012197940722024-02-16T07:00:00.006-05:002024-02-16T16:02:26.721-05:00Janover: Bringing Better Experience to Real Estate Lending<p style="text-align: center;"><span style="font-family: verdana;"> </span><span style="background-color: #eaf1dd; color: #4f6228; font-family: Castellar, serif; font-size: 48pt;">PRIME SERIES</span></p><br /><ul style="text-align: left;"><li><span style="font-family: verdana;"><span style="font-size: 13pt; line-height: 125%;">Janover brings a new search and
application platform to the commercial real estate lending market, using technology
and artificial intelligence to make the process more human.</span></span></li></ul><ul style="text-align: left;"><li><span style="font-family: verdana;"><span style="font-size: 13pt; line-height: 125%;">Real estate lending is expected to recover
in 2024, after inflation, rising interest rates and persistent vacancies due to
persistent work-from home arrangements led to a decade low in 2023.</span></span></li></ul><ul style="text-align: left;"><li><span style="font-family: verdana;"><span style="font-size: 13pt; line-height: 125%;">Recovery in real estate loan
activity or none, frictions in the lending process present obstacles and
increase costs for borrowers and frustrate lenders looking for customers.</span></span><span style="font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;"> </span></li></ul><ul style="text-align: left;"><li><span style="font-family: verdana; font-size: 13pt; line-height: 125%; text-indent: -0.25in;">The Janover team believes they can
democratize the prevailing real estate lending sector with a platform that
brings transparency to lender discovery and streamlines applications.</span></li></ul><ul style="text-align: left;"><li><span style="font-family: verdana;"><span style="font-size: 13pt; line-height: 125%;">A recent strategic acquisition of a
complementary business and new partnerships are expected to boost growth beginning
in the current year.</span></span></li></ul><ul style="text-align: left;"><li><span style="font-family: verdana;"><span style="font-size: 13pt; line-height: 125%;">Janover stock appears to have gone
unnoticed by investors, leaving an unappreciated opportunity in the fintech
sector.<o:p></o:p></span></span></li></ul><!--[if !supportLists]--><p></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><o:p><span style="font-family: verdana;"> </span></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">The real estate
industry is staging for a recovery this year as inflation subsides and interest
rates stabilize.<span style="mso-spacerun: yes;"> </span>The <a href="https://www.mba.org/"><span style="color: #38761d;"><b>Mortgage Bankers Association</b></span></a> estimates the
industry could experience 19% increase in the dollar value of all real estate loan
volume in 2024 over 2023.<span style="mso-spacerun: yes;"> </span>Commercial and
multifamily mortgage loans are expected to lead the industry with 29%
year-over-year increase in loan value.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">The turnaround
is not likely there will be a complete U-turn to how things were in real estate
lending before the coronavirus pandemic with the attendant inflation and higher
interest rates.<span style="mso-spacerun: yes;"> </span>Demand for office space
has been profoundly altered, shifting plans and strategies for real estate
projects. Perhaps more importantly, real estate professionals are looking for
change in how they go about their business. <o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Decision makers
of all stripes have grown accustomed to the immediacy and convenience of
digital applications.<span style="mso-spacerun: yes;"> </span>The analog
practices of the past are just not good enough for the present-day real estate sector.
<span style="mso-spacerun: yes;"> </span>Technology based on artificial
intelligence (AI) is well-suited to industry that requires participants to wade
through vast amounts of data.<span style="mso-spacerun: yes;"> </span>Programs enhanced
with AI can efficiently sift through the bits and bytes to streamline property
search and analysis, deepen due diligence, fine tune project design or match compatible
counterparties.<span></span></span></span></p><a name='more'></a><span style="font-family: verdana;"><span style="mso-spacerun: yes;"> </span><o:p></o:p></span><p></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><b><i><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Fintech
Marketplace Debuts as Real Estate Sector Rebounds<o:p></o:p></span></span></i></b></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;"><a href="https://janover.co/" target="_blank"><span style="color: #38761d;"><b>Janover, Inc. (JNVR)</b></span></a> may have debuted its business-to-business fintech marketplace at precisely the
right time as the real estate sector reawakens and developers need financing.<span style="mso-spacerun: yes;"> </span>Proprietary algorithms in the platform automatically
connect borrowers to optimum loan options or to the advisors best suited to serve
as a guide to the most suitable loan product.<span style="mso-spacerun: yes;">
</span>For borrowers the Janover marketplace brings transparency and breadth to
the task of finding a suitable lender whether in their own neighborhood or beyond.<span style="mso-spacerun: yes;"> </span>On the other side, loan originators and other
capital markets players can more easily communicate with borrowers in any
geography.<o:p></o:p></span></span></p>
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgcrbetgkmhLxt_vU3cw63iyDaCtyn8ahm_nPtaQZ7tsc_VeVSIuNOknVSZJbG_DFJnnvfkVUkaI5qmut1uy-LS9Ppim-tCyaIWdBFKBrDpNJ6KVj63CmjyZosk0Nt3PW1gECyjRbW-4V9zO3QF06tBs_Lwx9R7TJwg4Ofr9xpTLzGf9KF4Pyxwnw/s1149/Marketplace%20Diagram.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="672" data-original-width="1149" height="338" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgcrbetgkmhLxt_vU3cw63iyDaCtyn8ahm_nPtaQZ7tsc_VeVSIuNOknVSZJbG_DFJnnvfkVUkaI5qmut1uy-LS9Ppim-tCyaIWdBFKBrDpNJ6KVj63CmjyZosk0Nt3PW1gECyjRbW-4V9zO3QF06tBs_Lwx9R7TJwg4Ofr9xpTLzGf9KF4Pyxwnw/w578-h338/Marketplace%20Diagram.jpg" width="578" /></a></div>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;"><br /></span></span></p><p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">The Janover team
believes their platform can democratize commercial real estate lending.<span style="mso-spacerun: yes;"> </span>An effective and efficient experience is
expected to help build the Janover brand for high quality service and financing
success.<span style="mso-spacerun: yes;"> </span>In a recent meeting with this
author, the Company’s CEO Blake Janover pointed to increasing traffic and users
on the marketplace.<span style="mso-spacerun: yes;"> </span>In 2023, the Company’s
platform recorded 88 million impressions and over 450 lender participants have
signed up.<span style="mso-spacerun: yes;"> </span>Lenders include two-thirds of
the largest 100 credit unions and nearly 10% of FDIC insured banks in the U.S.<span style="mso-spacerun: yes;"> </span>Over 100,000 borrows have made applications
and closed transactions totaled in excess of $600 million.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><b><i><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Revenue
Streams from Lending Activity<o:p></o:p></span></span></i></b></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Closed loans are
important to Janover since most of the Company’s fees are earned based on loan
value. <span style="mso-spacerun: yes;"> </span>So far collected fees have
averaged about 1% of total loan amount.<span style="mso-spacerun: yes;">
</span>Fees are paid at loan closing, giving Janover’s business model the benefit
of revenue visibility and collection.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">The Company saw
a strong boost in revenue from its platform in the year 2022, growing 8.6%
year-over-year to $2.15 million.<span style="mso-spacerun: yes;"> </span>However,
sales activity in the year 2023, seems to have succumbed to the real estate
industry malaise as revenue slipped slightly to $2.11 million in the twelve
months ending September 2023.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">To achieve
profitability the Company will need to pick up the pace as the industry leans
into the current year 2024.<span style="mso-spacerun: yes;"> </span>In the first
nine months of 2023, the Company reported operating expenses more than twice
its revenue. <span style="mso-spacerun: yes;"> </span>That said, it is important
to note the usage of cash support operations was significantly less than
reported expenses, totaling $908,139.<span style="mso-spacerun: yes;"> </span>This
compares better to $1,652,965 in total revenue in the first nine months of
2023.<span style="mso-spacerun: yes;"> </span>Stock based compensation and the
issuance of common stock to pay for professional services helped conserve cash resources.<span style="mso-spacerun: yes;"> </span>(All financial figures are from reports filed
with the SEC at SEC.gov.)<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><b><i><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Balance Sheet
Strength<o:p></o:p></span></span></i></b></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">For any company
that is still scaling up, it is important for investors to look closely at the
balance sheet.<span style="mso-spacerun: yes;"> </span>In Janover’s case, its
cash kitty was fortified in July 2023, by a common stock offering, in which 1.4
million shares were sold at $4.00 per share.<span style="mso-spacerun: yes;">
</span>The deal brought total shares outstanding to 10.0 million and cash in
the bank to $5.8 million at the end of September 2023. <span style="mso-spacerun: yes;"> </span>The Company has no debt to service, so cash resources
can be devoted exclusively to support operations and growth initiatives.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><b><i><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Robust
Sales Funnel<o:p></o:p></span></span></i></b></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">One of the keys
to success is a robust sales funnel.<span style="mso-spacerun: yes;"> </span>The
Company brags that over 88 million have visited the Company’s online platform
to review helpful real estate related content.<span style="mso-spacerun: yes;">
</span><o:p></o:p></span></span></p>
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgS4rjbQR85X6lMfMfWbw5pBPo4TFuX6YfboRdNbL8rFW7lEMq-h-p42OuWwORg9CbvXPLqflVk6zToSf_OTvwEDjpcnOmn0YQNwhaZqN1HBL_tZS6t5eTuiMBJAB1LJDMEAgbufc2kdfn-JvX5gmSwwZ3ULLAX5fhKGtblfjmVzUN1Cz0AL7xjdA/s1149/Sales%20Funnel%20Diagram.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="811" data-original-width="1149" height="295" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgS4rjbQR85X6lMfMfWbw5pBPo4TFuX6YfboRdNbL8rFW7lEMq-h-p42OuWwORg9CbvXPLqflVk6zToSf_OTvwEDjpcnOmn0YQNwhaZqN1HBL_tZS6t5eTuiMBJAB1LJDMEAgbufc2kdfn-JvX5gmSwwZ3ULLAX5fhKGtblfjmVzUN1Cz0AL7xjdA/w418-h295/Sales%20Funnel%20Diagram.jpg" width="418" /></a></div>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: verdana; font-size: 13pt;"><br /></span></p><p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: verdana; font-size: 13pt;">To reach additional
prospects, Janover has formed a strategic partnership with </span><a href="https://larosaholdings.com/" style="font-family: verdana; font-size: 13pt;"><span style="color: #38761d;"><b>La Rosa Holdings</b></span></a><span style="font-family: verdana; font-size: 13pt;">, an agent-centric real
estate company specializing in residential and commercial real estate
brokerage.</span><span style="font-family: verdana; font-size: 13pt;"> </span><span style="font-family: verdana; font-size: 13pt;">La Rosa will introduce
Janover to clients seeking a commercial loan and in return La Rosa’s brokers
will get visibility on the Janover marketplace.</span><span style="font-family: verdana; font-size: 13pt;">
</span><span style="font-family: verdana; font-size: 13pt;">As better loan outcomes build, the relationship is expected to have a reinforcing
effect for both companies.</span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">A similar
strategically advantageous partnership was made earlier in 2023, with <a href="https://www.xchangefi.com/"><span style="color: #38761d;"><b>Xchange.loans, Inc.</b></span></a>, an online
marketplace for buying and selling commercial loans.<span style="mso-spacerun: yes;"> </span>Cross-promotion of the respective loan products
is likely to benefit both Xchange and Janover.<span style="mso-spacerun: yes;">
</span>As refinancing activity picks up in 2024, members of Janover’s lending
network is likely well poised to use Xchange’s services to sell their existing
mortgages.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">The Company may
have received some free help in gaining market visibility.<span style="mso-spacerun: yes;"> </span>The Janover platform was recently recognized
by <a href="https://www.globest.com/?slreturn=20240111230854"><span style="color: #38761d;"><b>GlobeSt.com</b></span></a>
and an ‘influencer’ in commercial real estate technology.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>GlobeSt.com
itself gets over a half-million page views per month from professionals and
consumers looking for recommendations on commercial real estate topics.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><b><i><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Strategic
Investments Could Ratchet Revenue Higher<o:p></o:p></span></span></i></b></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Additional growth
could follow strategic investments.<span style="mso-spacerun: yes;"> </span>In
November 2023, Janover acquired <a href="https://www.groundbreaker.co/"><span style="color: #38761d;"><b>Groundbreaker
Technologies</b></span></a>, a privately-held software-as-a-service platform for
commercial property professionals.<span style="mso-spacerun: yes;"> </span>Transaction
details were not disclosed.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">The platform
enables customer relationship management among other key functions.<span style="mso-spacerun: yes;"> </span>The SaaS model is expected to become an
important revenue generator for the Company.<span style="mso-spacerun: yes;">
</span>Indeed, since the Groundbreaker deal was completed, Janover initiated an
AI-enabled chatbot for commercial lenders.<span style="mso-spacerun: yes;">
</span>The chatbot is expected to improve communications with potential
borrowers, speeding up the mutual screening and qualification process between
lenders and borrowers.<span style="mso-spacerun: yes;"> </span>The chatbot is
being tested by <a href="https://geltfinancial.com/"><span style="color: #38761d;"><b>Gelt Financial</b></span></a>, a nationwide
private real estate lender that boast providing over $1 billion in financings
since inception.<span style="mso-spacerun: yes;"> </span>The chatbot will be
initially launched with a select group of commercial lenders.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Janover has also
invested in a complementary product offering to better leverage the Company’s
building lender and borrower networks. <span style="mso-spacerun: yes;"> </span>In January 2024, the company launch Janover
Insurance Group as a provider of multifamily and commercial property insurance.<span style="mso-spacerun: yes;"> </span>All real estate projects require insurance
and much like the task of finding a good lender, pursuit of the best insurance
coverage is frustrating and time consuming. <span style="mso-spacerun: yes;"> </span>Janover has engaged a strategic advisor to
organize and launch the commercial insurance offering later in 2024.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><b><i><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Investors
Beware<o:p></o:p></span></span></i></b></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Janover appears
to have considerable opportunity ahead for its innovative fintech platform.<span style="mso-spacerun: yes;"> </span>Nonetheless, investors will need a lengthy investment
horizon to wait for the Company to scale and reach profitability.<span style="mso-spacerun: yes;"> </span>A patient temperament may also be needed to
establish a long position in JNVR.<span style="mso-spacerun: yes;">
</span>Trading volume averages about 80,000 shares per session.<span style="mso-spacerun: yes;"> </span>The modest trading activity stems in large
part to flotation.<span style="mso-spacerun: yes;"> </span>Insiders command
nearly two-thirds of the outstanding common stock shares.<span style="mso-spacerun: yes;"> </span>Thus, the constructive flotation of tradeable
shares is around 4.0 million.<span style="mso-spacerun: yes;"> </span>Stocks with
lower flotation can be more volatile and bid/ask spreads can be wider.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Significant
inside ownership presents a second concern for investors.<span style="mso-spacerun: yes;"> </span>The majority shareholder is the Company’s founder,
chairman and chief executive officer, Blake Janover.<span style="mso-spacerun: yes;"> </span>In addition to 5.8 million shares of common stock,
Mr. Janover owns 10,000 shares of Series A preferred stock with voting power.<span style="mso-spacerun: yes;"> </span>Consequently, he has considerable control
over the Company’s strategic direction and the deployment of assets.<span style="mso-spacerun: yes;"> </span>Until additional shares are sold to minority
investors or Mr. Janover divests shares, shareholders influence over the
Company’s future could be limited to jaw boning leadership.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">There is another
risk to a long position in JNVR.<span style="mso-spacerun: yes;"> </span>Favorable
trends in commercial real estate lending are attracting others to the fintech
space, potentially giving Janover some competition for borrower and lender
interest.<span style="mso-spacerun: yes;"> </span>For example, <a href="https://loan-street.com/"><span style="color: #38761d;"><b>LoanStreet</b></span></a>, Inc. offers a platform for
credit unions, banks and other lenders to manage loan portfolios with
streamlined processes and analytical tools. <span style="mso-spacerun: yes;"> </span>Likewise, <a href="https://blend.com/products/mortgage-suite/originations/"><span style="color: #38761d;"><b>Blend</b></span></a> operates
a platform to help lenders speed up and simplify the application approval
process for loans and mortgages.<span style="mso-spacerun: yes;"> </span>Even if
these two companies are not offering exactly the same product as Janover, they
are competing for the attention of the same lenders.<span style="mso-spacerun: yes;"> </span><a href="https://www.stacksource.com/"><b><span style="color: #38761d;">StackSource</span></b></a>
may be a more direct competitor with its platform connecting commercial real
estate investors with debt and equity financing sources.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">The presence of other
fintech players could have two sides.<span style="mso-spacerun: yes;"> </span>On
the one hand they are competing for the attention of the same group of lenders
and potentially borrowers as well.<span style="mso-spacerun: yes;"> </span>Then
again multiple sources of the same fintech message could help build legitimacy
for the entire group.<span style="mso-spacerun: yes;"> </span>Either way, the
most robust platform will probably grab the greatest market share.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><b><i><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Conclusion<o:p></o:p></span></span></i></b></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">So far is
appears Janover’s B2B Fintech Marketplace could take top honors for robust
functionality.<span style="mso-spacerun: yes;"> </span>Furthermore, the Janover
team has plans to add even more services and products to make real estate development
easier.<span style="mso-spacerun: yes;"> </span>Expect the reports for the year
ending December 2023 each quarter report during 2024, to impact the stock price
and trading activity as the Company reports progress with boosting marketplace
activity.<o:p></o:p></span></span></p>
<p align="center" class="MsoNormal" style="margin-bottom: 10pt; text-align: center;"><span style="font-size: 13pt; line-height: 125%;"><o:p><span style="font-family: verdana;"> </span></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><o:p><span style="font-family: verdana;"> </span></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><i style="mso-bidi-font-style: normal;"><span style="color: #4f6228; font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Neither the author of the Small Cap
Strategist web log, Crystal Equity Research nor its affiliates have a
beneficial interest in the companies mentioned herein. <o:p></o:p></span></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><i style="mso-bidi-font-style: normal;"><span style="color: #4f6228; font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Underwriters of the Prime series may
have a beneficial interest in, serve as agents of, or act as advisors to the
companies mentioned herein.<o:p></o:p></span></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><i style="mso-bidi-font-style: normal;"><span style="font-size: 13pt; line-height: 125%;"><o:p><span style="font-family: verdana;"> </span></o:p></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><o:p><span style="font-family: verdana;"> </span></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><o:p><span style="font-family: verdana;"> </span></o:p></span></p>Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.com0tag:blogger.com,1999:blog-23359270.post-72180882014760514802024-02-09T07:00:00.046-05:002024-02-16T15:59:17.796-05:00Clearmind Medicine: Exploring a Pathway out of Alcohol Abuse<p style="text-align: center;"> <span style="background-color: #eaf1dd; color: #4f6228; font-family: Castellar, serif; font-size: 48pt;">PRIME SERIES</span></p><p style="text-align: center;"><span style="background-color: #eaf1dd; color: #4f6228; font-family: Castellar, serif; font-size: 48pt;"><br /></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Clearmind Medicine
(CMND) is a clinical stage pharmaceutical company with the promising <i>CMND-100</i>
candidate at the front end of its pipeline. <span style="mso-spacerun: yes;"> </span><i>CMND-100</i> is based on the psychoactive compound
MEAI, shorthand for the synthetic molecule 5-<b>ME</b>thoxy-2-<b>A</b>mino<b>I</b>ndine.<span style="mso-spacerun: yes;"> </span>The Company purchased the compound in 2021,
and has since completed several pre-clinical studies in animals to establish safety
and metabolic profiles. <span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">One of the pre-clinical
studies tested MEAI as a curb for alcohol cravings in ‘binge drinking’ mice.<span style="mso-spacerun: yes;"> </span>The MEAI compound interacts with central nervous
system elements, specifically serotonergic receptors 5-HT1A and 5-HT2B as well
as adrenergic receptors α2A, α2B and α2C. <span style="mso-spacerun: yes;"> </span>The receptor 5-HT1A is particularly important
in alcohol dependence, so agonists of this receptor could help in reducing
alcohol intake.<span style="mso-spacerun: yes;"> </span>Importantly, MEAI may
have application for other binge-like diseases such as cocaine abuse and overeating.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Results for
early tests have been promising, prompting the Company to make plans for human
clinical trials.<span style="mso-spacerun: yes;"> </span>In early 2023, an Investigational
New Drug (IND) application was submitted to the U.S. Federal Drug
Administration (FDA) for the first human clinical trials of MEAI as <i>CMND-100</i>
aimed at patients with Alcohol Abuse Disorder or AUD.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">The U.S. trials will
be conducted at the Yale School of Medicine’s Department of Psychiatry and
Johns Hopkins University School of Medicine.<span style="mso-spacerun: yes;">
</span>A similar application has been submitted to <a href="https://www.pharma-israel.org.il/en/activities/regulations/">Israel’s Pharmaceutical
Division of the Ministry of Health</a>, which regulates the drug registration
process in that country.</span></span></p>
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<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj9NNfNYPgCkhxZSz_y7r1NDEEABXPcH-2o2sJUkPvy8Mjdi3EU-TTonCczTUaJwaUfKJazAspw3v-d9gU1ah5SjMLbp-nt4X9ydmpiLecXKwbzlDMnFPWemPgdBdQV8M90eFTG-Xff0hwzyvigp1y_ej6oX9uJkPE1O76Dtpc2zBjb19IrhMzToA/s925/Receptor%20Image.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="412" data-original-width="925" height="216" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj9NNfNYPgCkhxZSz_y7r1NDEEABXPcH-2o2sJUkPvy8Mjdi3EU-TTonCczTUaJwaUfKJazAspw3v-d9gU1ah5SjMLbp-nt4X9ydmpiLecXKwbzlDMnFPWemPgdBdQV8M90eFTG-Xff0hwzyvigp1y_ej6oX9uJkPE1O76Dtpc2zBjb19IrhMzToA/w484-h216/Receptor%20Image.jpg" width="484" /></a></div>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><b><i><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;"><br /></span></span></i></b></p><p class="MsoNormal" style="margin-bottom: 10.0pt;"><b><i><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Speculative
and Compelling<o:p></o:p></span></span></i></b></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Shares of Clearmind
Medicine offer a stake in a promising compound aimed at diseases with
increasing incidence and few effective treatments.<span style="mso-spacerun: yes;"> </span>The bull case for the stock balances the
risks of an early-stage company with the opportunity of large, but underserved patient
groups.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">In this author’s
view, the stock is best suited for investors with a palate for the unique risks
inherent in pharmaceutical development<span style="mso-spacerun: yes;">
</span>-<span style="mso-spacerun: yes;"> </span>an average 10% probability for
successful completion of clinical trials and regulatory approval of newly
discovered therapeutic compounds.<span style="mso-spacerun: yes;"> </span>Yet,
once the details are hammered out, regulatory approval of <i>CMND-100</i> could
open the door to a market primed for effective therapies of binge behavior.<span style="mso-spacerun: yes;"> </span>As is discussed below, sales and profit
potential in the AUD market alone is compelling. <span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><b><i><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Taking psychoactive
therapies seriously<o:p></o:p></span></span></i></b></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Mention psychedelic
drugs and many people might think first of LSD and the drug fueled 1960’s and
1970’s<span style="mso-spacerun: yes;"> </span>-<span style="mso-spacerun: yes;">
</span>not a therapy to be taken seriously by the medical community. <span style="mso-spacerun: yes;"> </span>It is time to recalibrate!<span style="mso-spacerun: yes;"> </span>Psychoactive compounds may have effective
properties for the treatment of numerous medical conditions.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Indeed, the U.S.
Federal Drug Administration has taken note and is ready to entertain regulatory
petitions for potential drug products.<span style="mso-spacerun: yes;">
</span>In August 2023, the FDA issued draft guidance for drug developers
entitled <a href="https://www.fda.gov/media/169694/download">“Psychedelic
Drugs:<span style="mso-spacerun: yes;"> </span>Considerations for Clinical
Investigations – Guidance for Industry”</a>.<span style="mso-spacerun: yes;">
</span>The FDA followed this publication with a virtual public workshop
entitled <a href="https://reaganudall.org/news-and-events/events/advancing-psychedelic-clinical-study-design">“Advancing
Psychedelic Clinical Study Design”</a> for researchers and industry.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Perhaps Clearmind
scientists could have benefited from the new guidance if the FDA had published
it a few months earlier.<span style="mso-spacerun: yes;"> </span>Nonetheless, in
January 2024, a Type A meeting with Clearmind scientists and FDA
representatives has apparently tightened up and refined the Company’s IND application
to proceed with tests of its <i>CMND-100</i> in humans.<span style="mso-spacerun: yes;"> </span>In recent conversations with this author, Clearmind
management expressed confidence in winning the FDA go-ahead for a Phase I clinical
trial in 2024. <o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><b><i><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Lucrative
target market for profit….or critical community service<o:p></o:p></span></span></i></b></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">The poignant difficulties
experienced by AUD suffers in terms of disruption in relationships, loss of
employment and costs of illness might be enough to attract some scientists to work
on the problem.<span style="mso-spacerun: yes;"> </span>However, for
profit-oriented companies and their investors, the market presents a particularly
lucrative investment opportunity.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Alcohol abuse is
among the most frustrating and costly diseases suffered by humans.<span style="mso-spacerun: yes;"> </span>The <a href="https://drugabusestatistics.org/alcohol-abuse-statistics/">National
Center for Drug Abuse Statistics (NCDAS)</a> estimates AUD along with alcoholism
kills over three million people each year, representing 6% of global deaths.<span style="mso-spacerun: yes;"> </span>Additionally, the financial burden of alcohol
misuse is enormous.<span style="mso-spacerun: yes;"> </span>Indeed, the <a href="https://www.med.unc.edu/alcohol/education-prevention/alcoholism-and-alcohol-abuse/costs-of-alcohol-abuse/">UNC
School of Medicine Bowles Center for Alcohol Studies</a> estimates over 15% of
the entire national health care budget in the U.S. is spent on treating
conditions related to substance abuse, including alcohol.<span style="mso-spacerun: yes;"> </span>The <a href="https://www.cdc.gov/media/images/releases/2015/p1015-excessive-alcohol.pdf">Centers
for Disease Control and Prevention</a> takes a view from a higher vantage
point, estimating excessive alcohol use results in an economic loss of $249
billion annually from the U.S. economy alone.<span style="mso-spacerun: yes;">
</span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">With an economic
significance of such import, it follows that the market opportunity for AUD solutions
is large and growing.<span style="mso-spacerun: yes;"> </span><a href="https://www.futuremarketinsights.com/reports/alcohol-use-disorder-treatment-market#:~:text=The%20global%20alcohol%20use%20disorder%20treatment%20market%20garnered,6.4%25%20in%20the%20forecast%20period%202023%20to%202033.">Future
Market Insights</a>, an industry research firm, estimates the global AUD
treatment market generated $700 million in value in 2023.<span style="mso-spacerun: yes;"> </span>Within the next ten years the firm estimates
the rising incidence of AUD and binge drinking could drive the market value to
$1.3 billion by 2033.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><b><i><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Competitors
and Peers<o:p></o:p></span></span></i></b></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Presently there
are a handful of medical treatments for AUD.<span style="mso-spacerun: yes;">
</span>Despite long-time approval by the U.S. FDA, none have captured dominant market
share. The segment may have also lost a participant. <o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Sanofi announced
in April 2023, it would be taking its Antabuse (disulfiram) off the market citing
supply chain issues.<span style="mso-spacerun: yes;"> </span>However, thin margins
on a low-priced product probably also played a role.<span style="mso-spacerun: yes;"> </span>Disulfiram stops the body from breaking down
ethanol in alcoholic beverages, leading to such severe headaches, nausea and
vomiting.<span style="mso-spacerun: yes;"> </span>The effects are so severe patients
are dissuaded from consuming alcohol.<span style="mso-spacerun: yes;"> </span>The
fact that many patients are disappointed in Sanofi’s decision reveals the lengths
to which AUD suffers will go to get relief. <span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Notably, two companies
have naltrexone-based therapies on the market.<span style="mso-spacerun: yes;">
</span>Originally intended for emergency treatment of opioid overdose, naltrexone
has its own side effects, such as stomach cramping, anxiety, headache and trouble
sleeping.<span style="mso-spacerun: yes;"> </span>Naltrexone packaging also carries
the hated FDA black box with a warning for potential liver damage if taken at
doses higher than recommended.<span style="mso-spacerun: yes;"> </span>Despite
the side effects, naltrexone branded as Vivitrol in 2023 earned an estimated $410
million in annual sales for its owner Alkermes plc (ALKS).<o:p></o:p></span></span></p><p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;"><br /></span></span></p>
<div align="center">
<table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; mso-border-alt: solid #F7CAAC .5pt; mso-border-insideh: .5pt solid #F7CAAC; mso-border-insidev: .5pt solid #F7CAAC; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 1184;">
<tbody><tr style="height: .4in; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td colspan="4" style="background: #FFC000; border-bottom: solid #F4B083 1.5pt; border: solid #F7CAAC 1.0pt; height: .4in; mso-border-alt: solid #F7CAAC .5pt; mso-border-bottom-alt: solid #F4B083 1.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 385.55pt;" width="514">
<p align="center" class="MsoNoSpacing" style="text-align: center;"><span style="font-family: verdana;"><b><span style="color: black;">Regulatory
Approved Therapies for AUD</span></b><b><o:p></o:p></b></span></p>
</td>
</tr>
<tr style="mso-yfti-irow: 1;">
<td style="border-top: none; border: solid #F7CAAC 1.0pt; mso-border-alt: solid #F7CAAC .5pt; mso-border-top-alt: solid #F7CAAC .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.2in;" valign="top" width="115">
<p align="center" class="MsoNoSpacing" style="text-align: center;"><b><span style="font-family: verdana;">Compound Name<o:p></o:p></span></b></p>
</td>
<td style="border-bottom: solid #F7CAAC 1.0pt; border-left: none; border-right: solid #F7CAAC 1.0pt; border-top: none; mso-border-alt: solid #F7CAAC .5pt; mso-border-left-alt: solid #F7CAAC .5pt; mso-border-top-alt: solid #F7CAAC .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.2pt;" valign="top" width="91">
<p align="center" class="MsoNoSpacing" style="text-align: center;"><b><span style="font-family: verdana;">Brand Name<o:p></o:p></span></b></p>
</td>
<td style="border-bottom: solid #F7CAAC 1.0pt; border-left: none; border-right: solid #F7CAAC 1.0pt; border-top: none; mso-border-alt: solid #F7CAAC .5pt; mso-border-left-alt: solid #F7CAAC .5pt; mso-border-top-alt: solid #F7CAAC .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 65.0pt;" valign="top" width="87">
<p align="center" class="MsoNoSpacing" style="text-align: center;"><b><span style="font-family: verdana;">FDA Approval<o:p></o:p></span></b></p>
</td>
<td style="border-bottom: solid #F7CAAC 1.0pt; border-left: none; border-right: solid #F7CAAC 1.0pt; border-top: none; mso-border-alt: solid #F7CAAC .5pt; mso-border-left-alt: solid #F7CAAC .5pt; mso-border-top-alt: solid #F7CAAC .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 165.95pt;" valign="top" width="221">
<p align="center" class="MsoNoSpacing" style="text-align: center;"><b><span style="font-family: verdana;">Manufacturers<o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: .3in; mso-yfti-irow: 2;">
<td style="border-top: none; border: solid #F7CAAC 1.0pt; height: .3in; mso-border-alt: solid #F7CAAC .5pt; mso-border-top-alt: solid #F7CAAC .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.2in;" width="115">
<p class="MsoNoSpacing"><b><span style="font-size: 10.0pt;"><span style="font-family: verdana;">Disulfiram<o:p></o:p></span></span></b></p>
</td>
<td style="border-bottom: solid #F7CAAC 1.0pt; border-left: none; border-right: solid #F7CAAC 1.0pt; border-top: none; height: .3in; mso-border-alt: solid #F7CAAC .5pt; mso-border-left-alt: solid #F7CAAC .5pt; mso-border-top-alt: solid #F7CAAC .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.2pt;" width="91">
<p class="MsoNoSpacing"><span style="font-size: 10.0pt;"><span style="font-family: verdana;">Antabuse<o:p></o:p></span></span></p>
</td>
<td style="border-bottom: solid #F7CAAC 1.0pt; border-left: none; border-right: solid #F7CAAC 1.0pt; border-top: none; height: .3in; mso-border-alt: solid #F7CAAC .5pt; mso-border-left-alt: solid #F7CAAC .5pt; mso-border-top-alt: solid #F7CAAC .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 65.0pt;" width="87">
<p align="center" class="MsoNoSpacing" style="text-align: center;"><span style="font-size: 10.0pt;"><span style="font-family: verdana;">1949<o:p></o:p></span></span></p>
</td>
<td style="border-bottom: solid #F7CAAC 1.0pt; border-left: none; border-right: solid #F7CAAC 1.0pt; border-top: none; height: .3in; mso-border-alt: solid #F7CAAC .5pt; mso-border-left-alt: solid #F7CAAC .5pt; mso-border-top-alt: solid #F7CAAC .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 165.95pt;" width="221">
<p class="MsoNoSpacing"><span style="font-size: 10.0pt;"><span style="font-family: verdana;">Sanofi (SNY:<span style="mso-spacerun: yes;"> </span>NYSE)<o:p></o:p></span></span></p>
</td>
</tr>
<tr style="height: .3in; mso-yfti-irow: 3;">
<td style="border-top: none; border: solid #F7CAAC 1.0pt; height: .3in; mso-border-alt: solid #F7CAAC .5pt; mso-border-top-alt: solid #F7CAAC .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.2in;" width="115">
<p class="MsoNoSpacing"><b><span style="font-size: 10.0pt;"><span style="font-family: verdana;">Naltrexone<o:p></o:p></span></span></b></p>
</td>
<td style="border-bottom: solid #F7CAAC 1.0pt; border-left: none; border-right: solid #F7CAAC 1.0pt; border-top: none; height: .3in; mso-border-alt: solid #F7CAAC .5pt; mso-border-left-alt: solid #F7CAAC .5pt; mso-border-top-alt: solid #F7CAAC .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.2pt;" width="91">
<p class="MsoNoSpacing"><span style="font-size: 10.0pt;"><span style="font-family: verdana;">ReVia<o:p></o:p></span></span></p>
</td>
<td style="border-bottom: solid #F7CAAC 1.0pt; border-left: none; border-right: solid #F7CAAC 1.0pt; border-top: none; height: .3in; mso-border-alt: solid #F7CAAC .5pt; mso-border-left-alt: solid #F7CAAC .5pt; mso-border-top-alt: solid #F7CAAC .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 65.0pt;" width="87">
<p align="center" class="MsoNoSpacing" style="text-align: center;"><span style="font-size: 10.0pt;"><span style="font-family: verdana;">1994<o:p></o:p></span></span></p>
</td>
<td style="border-bottom: solid #F7CAAC 1.0pt; border-left: none; border-right: solid #F7CAAC 1.0pt; border-top: none; height: .3in; mso-border-alt: solid #F7CAAC .5pt; mso-border-left-alt: solid #F7CAAC .5pt; mso-border-top-alt: solid #F7CAAC .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 165.95pt;" width="221">
<p class="MsoNoSpacing"><span style="font-size: 10.0pt;"><span style="font-family: verdana;">Teva Pharma (TEVA:<span style="mso-spacerun: yes;"> </span>NYSE)<o:p></o:p></span></span></p>
</td>
</tr>
<tr style="height: .3in; mso-yfti-irow: 4;">
<td style="border-top: none; border: solid #F7CAAC 1.0pt; height: .3in; mso-border-alt: solid #F7CAAC .5pt; mso-border-top-alt: solid #F7CAAC .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.2in;" width="115">
<p class="MsoNoSpacing"><b><span style="font-size: 10.0pt;"><span style="font-family: verdana;">Acamprosate<o:p></o:p></span></span></b></p>
</td>
<td style="border-bottom: solid #F7CAAC 1.0pt; border-left: none; border-right: solid #F7CAAC 1.0pt; border-top: none; height: .3in; mso-border-alt: solid #F7CAAC .5pt; mso-border-left-alt: solid #F7CAAC .5pt; mso-border-top-alt: solid #F7CAAC .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.2pt;" width="91">
<p class="MsoNoSpacing"><span style="font-size: 10.0pt;"><span style="font-family: verdana;">Campral<o:p></o:p></span></span></p>
</td>
<td style="border-bottom: solid #F7CAAC 1.0pt; border-left: none; border-right: solid #F7CAAC 1.0pt; border-top: none; height: .3in; mso-border-alt: solid #F7CAAC .5pt; mso-border-left-alt: solid #F7CAAC .5pt; mso-border-top-alt: solid #F7CAAC .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 65.0pt;" width="87">
<p align="center" class="MsoNoSpacing" style="text-align: center;"><span style="font-size: 10.0pt;"><span style="font-family: verdana;">2004<o:p></o:p></span></span></p>
</td>
<td style="border-bottom: solid #F7CAAC 1.0pt; border-left: none; border-right: solid #F7CAAC 1.0pt; border-top: none; height: .3in; mso-border-alt: solid #F7CAAC .5pt; mso-border-left-alt: solid #F7CAAC .5pt; mso-border-top-alt: solid #F7CAAC .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 165.95pt;" width="221">
<p class="MsoNoSpacing"><span style="font-size: 10.0pt;"><span style="font-family: verdana;">Forest Sub of Allergan (AGN:<span style="mso-spacerun: yes;"> </span>NYSE)<o:p></o:p></span></span></p>
</td>
</tr>
<tr style="height: .3in; mso-yfti-irow: 5; mso-yfti-lastrow: yes;">
<td style="border-top: none; border: solid #F7CAAC 1.0pt; height: .3in; mso-border-alt: solid #F7CAAC .5pt; mso-border-top-alt: solid #F7CAAC .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.2in;" width="115">
<p class="MsoNoSpacing"><b><span style="font-size: 10.0pt;"><span style="font-family: verdana;">Naltrexone<o:p></o:p></span></span></b></p>
</td>
<td style="border-bottom: solid #F7CAAC 1.0pt; border-left: none; border-right: solid #F7CAAC 1.0pt; border-top: none; height: .3in; mso-border-alt: solid #F7CAAC .5pt; mso-border-left-alt: solid #F7CAAC .5pt; mso-border-top-alt: solid #F7CAAC .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.2pt;" width="91">
<p class="MsoNoSpacing"><span style="font-size: 10.0pt;"><span style="font-family: verdana;">Vivitrol<o:p></o:p></span></span></p>
</td>
<td style="border-bottom: solid #F7CAAC 1.0pt; border-left: none; border-right: solid #F7CAAC 1.0pt; border-top: none; height: .3in; mso-border-alt: solid #F7CAAC .5pt; mso-border-left-alt: solid #F7CAAC .5pt; mso-border-top-alt: solid #F7CAAC .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 65.0pt;" width="87">
<p align="center" class="MsoNoSpacing" style="text-align: center;"><span style="font-size: 10.0pt;"><span style="font-family: verdana;">2006<o:p></o:p></span></span></p>
</td>
<td style="border-bottom: solid #F7CAAC 1.0pt; border-left: none; border-right: solid #F7CAAC 1.0pt; border-top: none; height: .3in; mso-border-alt: solid #F7CAAC .5pt; mso-border-left-alt: solid #F7CAAC .5pt; mso-border-top-alt: solid #F7CAAC .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 165.95pt;" width="221">
<p class="MsoNoSpacing"><span style="font-size: 10.0pt;"><span style="font-family: verdana;">Alkermes, plc
(ALKS:<span style="mso-spacerun: yes;"> </span>NYSE)<o:p></o:p></span></span></p>
</td>
</tr>
</tbody></table>
</div>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="line-height: 125%;"><o:p><span style="font-family: verdana; font-size: x-small;"><i> Source: Crystal Equity Research, company reports filed with sec.com</i></span></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;"><br /></span></span></p><p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">There are other
developmental stage companies vying for the next FDA approved AUD
treatment.<span style="mso-spacerun: yes;"> </span>For example, Adial Pharmaceuticals
(ADIL) is working on AD04, a serotonin-3 antagonist targeted at certain genetically
qualified patients suffering from AUD.<span style="mso-spacerun: yes;"> </span>Currently,
the company is planning two Phase III trials to satisfy regulatory applications
in both the U.S. and European Union.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><b><i><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Bootstrapping
to Higher Valuation<o:p></o:p></span></span></i></b></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">The aspirations
of Clearmind’s scientists are all just talk without adequate capital to complete
required development work and clinical trials.<span style="mso-spacerun: yes;">
</span>In January 2024, the Company raised a total of $2.4 million in new capital
through the sale of 1.5 million shares of common stock and another 1.5 million warrants.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">After the recent
capital raise capital resources are estimated near $6.05 million.<span style="mso-spacerun: yes;"> </span>(Cash at the end of July 2023:<span style="mso-spacerun: yes;"> </span>$3.85M + Exercise of warrants:<span style="mso-spacerun: yes;"> </span>$3.50M <span style="mso-spacerun: yes;"> </span>+ Offering proceeds:<span style="mso-spacerun: yes;"> </span>$2.4M – Estimated cash used to support
operations through Jan. 2024:<span style="mso-spacerun: yes;"> </span>$3.70M)<span style="mso-spacerun: yes;"> </span>Management has guided for current cash reserves
closer to double digits, suggesting a significant reduction in cash usage in
the last six months while the Company has hammered out details for its IND application
to the U.S. FDA.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">In a recent
conversation with this author, the Clearmind team expressed confidence in having
the resources to complete planned clinical trials for <i>CMND-100</i>.<span style="mso-spacerun: yes;"> </span>This would be an important achievement, given
that management would have data from Phase I clinical trials to cite if additional
capital is needed for the next step.<span style="mso-spacerun: yes;"> </span>The
Company can thus artfully accomplish what sometimes eludes developmental stage
companies:<span style="mso-spacerun: yes;"> </span>minimizing dilution by raising
only just enough capital to achieve measurable results and then using those
results to bootstrap to a higher valuation in the next financing effort.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><b><i><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Value
drivers…multiple treatment applications<o:p></o:p></span></span></i></b></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">This article has
focused on the AUD treatment application.<span style="mso-spacerun: yes;">
</span>However, that might be selling the Company short on the potential in <i>CMND-100</i>.
<span style="mso-spacerun: yes;"> </span>The MEAI compound may have applications for
obesity and drug addiction as well.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Clearmind recently
cooperated with research scientists at the Bar-Ilan University in Israel in
conducting pre-clinical trials of the Company MEAI molecule in animals
conditioned with cocaine.<span style="mso-spacerun: yes;"> </span>The trial
results suggested MEAI could be helpful in reducing cravings and altering
behaviors.<span style="mso-spacerun: yes;"> </span>Importantly, the trials
established the MEAI compound is not itself addictive.<span style="mso-spacerun: yes;"> </span>Clearmind has a long-term license agreement
with BIRAD, the university’s research and development arm, to use a joint
patent for cocaine treatment.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Additionally,
Clearmind is collaborating with SciSparc Ltd. (SPRC), a clinical-stage
pharmaceutical company focused on disorders of the central nervous system.<span style="mso-spacerun: yes;"> </span>The SciSparc relationship is wide-reaching,
anticipating therapeutic applications for a lengthy list of mental health disorders
in addition to binge-like and addiction diseases. <span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Clearmind has
already filed six provisional patent applications with the U.S. Patent and
Trademark Office for combinations of psychoactive compounds using the Company’s
MEAI molecule alone as well as in combination with SciSparc’s proprietary
anti-inflamatory compound palmitoylethanolamide (PEA).<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">In November
2023, the partners announced results from a pre-clinical trial aimed at determining
optimal dosage of the MEAI-PEA combination.<span style="mso-spacerun: yes;">
</span>The animals in the trial were observed for metabolic factors such as fat
oxidation, weight loss and reduced appetite.<span style="mso-spacerun: yes;">
</span>The mice showed high tolerance at all dosage levels, reduction in food
consumption and improvement in fat oxidation.<span style="mso-spacerun: yes;">
</span>Clearmind leadership thinks the study is encouraging for use of the MEAI
compound for obesity and metabolic disorders with the results supporting
further study with animals and eventually humans. <span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Clearmind has a growing
portfolio of patent protected intellectual property<span style="mso-spacerun: yes;"> </span>-<span style="mso-spacerun: yes;"> </span>27
granted patents in the U.S., Europe and China with 24 patent applications
pending. <span style="mso-spacerun: yes;"> </span>Applications and awarded
patents cover both method of use and composition of matter, giving the Company
the means to prevent competitors from elbowing in with a competing MEAI
compound or from imitating the Company’s proprietary chemical mixtures. <o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><b><i><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Back of envelope
intrinsic value<o:p></o:p></span></span></i></b></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">It is possible
to value Clearmind’s entire patent portfolio, estimating sales and earnings
potential for each of the protected compounds.<span style="mso-spacerun: yes;">
</span>To reduce the number of assumptions to a more manageable level, a valuation
exercise was undertaken based only at the Company’s lead candidate and primary
target application, <i>CMND-100</i> as a treatment for AUD. <o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">The preferred approach
for valuing pharmaceutical companies is the discounted cash flow method.<span style="mso-spacerun: yes;"> </span>Industry averages for an early-stage companies
were used for the critical assumptions.<span style="mso-spacerun: yes;">
</span>In this calculation, the discount rate is used primarily to reflect the
time value of money.<span style="mso-spacerun: yes;"> </span>Additionally, estimated
cash flows were adjusted to reflect business perils, i.e. the possibility of
failure at the principal development stages.<span style="mso-spacerun: yes;">
</span>(Key assumptions and data points are detailed below.)<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">The exercise
found a risk adjusted intrinsic value of $4.78 per share for Clearmind, almost four
times the current stock price.<span style="mso-spacerun: yes;"> </span>Aside
from the effects of one assumption or another in the final outcome of the valuation
exercise, the difference between market and estimated stock value is probably
large due to investors’ view on execution risk.<span style="mso-spacerun: yes;">
</span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><b><i><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Much
potential, many possible stumbling blocks<o:p></o:p></span></span></i></b></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">And pre-clinical
trials have demonstrated its principal therapy <i>CNMD-100</i> based on the psychoactive
compound MEIA shows promise as a safe treatment for binge drinking.<span style="mso-spacerun: yes;"> </span>Nonetheless, there is still plenty of
opportunity for the Company to stub its corporate toe.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Successful
pre-clinical trials do not guarantee smooth sailing in human clinical
trials.<span style="mso-spacerun: yes;"> </span>The Company has lined up research
partners at ‘blue ribbon’ universities, but even if execution is perfect, the
MEIA compound could fall short of expectations as the Phase I trials unfold.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Clearmind has established
at least two strong development partnerships, one of which is with SciSparc,
another public pharmaceutical developer with complementary intellectual
property.<span style="mso-spacerun: yes;"> </span>It is notable that Clearmind
Medicine’s chief executive officer, Dr. Adi Zuloff-shani, is also the lead
science officer at SciSparc Ltd.<span style="mso-spacerun: yes;"> </span>So far,
the dual role has created some efficiency for Clearmind as in her role at SciSparc
Zuloff-Shani has already completed some required steps in Clearmind’s
development agenda.<span style="mso-spacerun: yes;"> </span>For example, qualification
of manufacturers for active ingredients is common to both firms. <span style="mso-spacerun: yes;"> </span>However, in the future potential conflicts
could arise as the two companies more forward to more advanced development work.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">The FDA’s recently
issued guidance for psychedelic compound development has also helped shine a
bright light on the therapeutic value of such compounds.<span style="mso-spacerun: yes;"> </span>Certainly, the FDA’s initiative is a plus for
CNMD shareholders, but there is still room for confusion or misstep.<span style="mso-spacerun: yes;"> </span>The FDA is still perfecting it position vis-à-vis
psychoactive compounds and could change its suggested plan of action to the
detriment of development projects already underway at Clearmind. <span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><b><i><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Conclusion<o:p></o:p></span></span></i></b></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Besides new fortifying
financial resources, the Company’s recent capital raise helped elevate Clearmind’s
visibility in the pharmaceutical sector as a developer with the capacity to
deliver favorable early-stage clinical trial results.<span style="mso-spacerun: yes;"> </span>In the current year, the Company’s principal
compound <i>CNMD-100</i> is likely to begin dosing and safety trials with
humans suffering from alcohol addiction.<span style="mso-spacerun: yes;">
</span>Investors with an extended investment horizon and the tolerance for
significant risk may find this inflection point is a compelling opportunity for
a stake in a<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt; margin-left: 39.0pt; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo2; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: verdana;"><span style="font-size: 13pt; line-height: 125%;"><span style="mso-list: Ignore;">·<span style="font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-variation-settings: normal; font-weight: normal; line-height: normal;">
</span></span></span><!--[endif]--><span style="font-size: 13pt; line-height: 125%;">potentially undervalued company
with a<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt; margin-left: 39.0pt; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo2; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: verdana;"><span style="font-size: 13pt; line-height: 125%;"><span style="mso-list: Ignore;">·<span style="font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-variation-settings: normal; font-weight: normal; line-height: normal;">
</span></span></span><!--[endif]--><span style="font-size: 13pt; line-height: 125%;">promising compound <i>CMND-10</i>0 aimed
at a<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt; margin-left: 39.0pt; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo2; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: verdana;"><span style="font-size: 13pt; line-height: 125%;"><span style="mso-list: Ignore;">·<span style="font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-variation-settings: normal; font-weight: normal; line-height: normal;">
</span></span></span><!--[endif]--><span style="font-size: 13pt; line-height: 125%;">large and growing market for
alcohol dependence treatment.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><o:p><span style="font-family: verdana;"> </span></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><o:p><span style="font-family: verdana;"> </span></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><i style="mso-bidi-font-style: normal;"><span style="color: #4f6228; font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Neither the author of the Small Cap
Strategist web log, Crystal Equity Research nor its affiliates have a
beneficial interest in the companies mentioned herein. <o:p></o:p></span></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><i style="mso-bidi-font-style: normal;"><span style="color: #4f6228; font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Underwriters of the Prime series may
have a beneficial interest in, serve as agents of, or act as advisors to the
companies mentioned herein.<o:p></o:p></span></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><o:p><span style="font-family: verdana;"> </span></o:p></span></p>
<p class="MsoNoSpacing"><o:p><span style="font-family: verdana;"> </span></o:p></p>
<div style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-element: para-border-div; padding: 1.0pt 4.0pt 1.0pt 4.0pt;">
<p class="MsoNormal" style="border: none; margin-bottom: 10.0pt; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 1.0pt 4.0pt 1.0pt 4.0pt; padding: 0in;"><b><span style="line-height: 125%;"><span style="font-family: verdana;">Valuation
Assumptions<span style="font-size: x-small;"><o:p></o:p></span></span></span></b></p>
<p class="MsoNoSpacing" style="border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 1.0pt 4.0pt 1.0pt 4.0pt; padding: 0in;"><span style="font-family: verdana; font-size: x-small;">Commercial Stage:<span style="mso-spacerun: yes;"> </span>Model Year 6</span></p><p class="MsoNoSpacing" style="border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 1.0pt 4.0pt 1.0pt 4.0pt; padding: 0in;"><span style="font-size: x-small;"><span style="font-family: verdana;">AUD market value: </span><span style="font-family: verdana;"> </span><span style="font-family: verdana;"> </span><span style="font-family: verdana;">current $700 million rising to $1.2 billion in
Year 6</span></span></p>
<p class="MsoNoSpacing" style="border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 1.0pt 4.0pt 1.0pt 4.0pt; padding: 0in;"><span style="font-family: verdana; font-size: x-small;">Market share:<span style="mso-tab-count: 1;"> </span>10%<o:p></o:p></span></p>
<p class="MsoNoSpacing" style="border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 1.0pt 4.0pt 1.0pt 4.0pt; padding: 0in;"><span style="font-family: verdana; font-size: x-small;">Cash earnings margin:<span style="mso-tab-count: 1;"> </span>8% <o:p></o:p></span></p>
<p class="MsoNoSpacing" style="border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 1.0pt 4.0pt 1.0pt 4.0pt; padding: 0in;"><span style="font-family: verdana; font-size: x-small;">Commercial stage growth rate:<span style="mso-tab-count: 1;"> </span>10%<o:p></o:p></span></p>
<p class="MsoNoSpacing" style="border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 1.0pt 4.0pt 1.0pt 4.0pt; padding: 0in;"><span style="font-family: verdana; font-size: x-small;">Cost of capital:<span style="mso-tab-count: 1;"> </span>18%<o:p></o:p></span></p>
<p class="MsoNoSpacing" style="border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 1.0pt 4.0pt 1.0pt 4.0pt; padding: 0in;"><span style="font-family: verdana; font-size: x-small;">Cash flow discount rate:<span style="mso-tab-count: 1;"> </span>11%<span style="mso-spacerun: yes;"> </span><span style="mso-tab-count: 2;"> </span><o:p></o:p></span></p>
<p class="MsoNoSpacing" style="border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 1.0pt 4.0pt 1.0pt 4.0pt; padding: 0in;"><span style="font-family: verdana; font-size: x-small;">Risk Adjustments: <span style="mso-tab-count: 1;"> </span>Phase I - 63%,
Phase II - 58%, Phase III - 85%<o:p></o:p></span></p>
<p class="MsoNoSpacing" style="border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 1.0pt 4.0pt 1.0pt 4.0pt; padding: 0in;"><span style="font-family: verdana; font-size: x-small;">Commercial stage balance sheet:<span style="mso-tab-count: 2;"> </span>No
cash, no debt<o:p></o:p></span></p>
<p class="MsoNoSpacing" style="border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 1.0pt 4.0pt 1.0pt 4.0pt; padding: 0in;"><span style="font-family: verdana; font-size: x-small;">Cash reinvestment in commercial stage:<span style="mso-tab-count: 2;"> </span>None<o:p></o:p></span></p>
<p class="MsoNoSpacing" style="border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 1.0pt 4.0pt 1.0pt 4.0pt; padding: 0in;"><span style="font-family: verdana; font-size: x-small;">Current shares outstanding:<span style="mso-tab-count: 1;"> </span>3.2
million<o:p></o:p></span></p>
<p class="MsoNoSpacing" style="border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 1.0pt 4.0pt 1.0pt 4.0pt; padding: 0in;"><o:p><span style="font-family: verdana; font-size: x-small;"> </span></o:p></p>
<p class="MsoNoSpacing" style="border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 1.0pt 4.0pt 1.0pt 4.0pt; padding: 0in;"><span style="font-family: verdana; font-size: x-small;">Risk adjusted estimated net present value:<span style="mso-spacerun: yes;"> </span>$15.29 million<o:p></o:p></span></p>
<p class="MsoNoSpacing" style="border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 1.0pt 4.0pt 1.0pt 4.0pt; padding: 0in;"><o:p><span style="font-family: verdana; font-size: x-small;"> </span></o:p></p>
<p class="MsoNoSpacing" style="border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 1.0pt 4.0pt 1.0pt 4.0pt; padding: 0in;"><span style="font-family: verdana; font-size: x-small;">Risk adjusted intrinsic value per share:<span style="mso-spacerun: yes;"> </span>$4.78<o:p></o:p></span></p>
<p class="MsoNoSpacing" style="border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 1.0pt 4.0pt 1.0pt 4.0pt; padding: 0in;"><o:p><span style="font-family: verdana; font-size: x-small;"> </span></o:p></p>
</div>
<p class="MsoNoSpacing"><o:p><span style="font-family: verdana;"> </span></o:p></p>
<p class="MsoNoSpacing"><o:p><span style="font-family: verdana;"> </span></o:p></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><o:p><span style="font-family: verdana;"> </span></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><o:p><span style="font-family: verdana;"> </span></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-size: 13pt; line-height: 125%;"><o:p><span style="font-family: verdana;"> </span></o:p></span></p>Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.com0tag:blogger.com,1999:blog-23359270.post-37402455022817793332024-01-05T08:45:00.002-05:002024-01-05T17:20:57.227-05:00Storming of the Capital<p><b><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">On the Anniversary of January 6, 2021 Storming of the
U.S. Capital: a look back at how Donald
Trump won the 2106 election from a financial analyst’s perspective. </span></span></b></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><i><span style="font-size: 13pt; line-height: 125%;"><o:p><span style="font-family: verdana;"> </span></o:p></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: verdana;"><i><span style="font-size: 13pt; line-height: 125%;">The following commentary was </span></i><b style="mso-bidi-font-weight: normal;"><i><span style="color: #538135; font-size: 13pt; line-height: 125%;"><a href="https://crystalequityresearch.blogspot.com/2017/01/understandable-terms.html"><span style="color: #538135; mso-themecolor: accent6; mso-themeshade: 191;">originally posted
on January 24, 2017</span></a>, </span></i></b><i><span style="font-size: 13pt; line-height: 125%;">following Donald Trump’s victory in the U.S. Electoral College in the 2016
Election.<span style="mso-spacerun: yes;"> </span>Trump was sworn in as president
of the United States despite Hillary Clinton prevailing by a significant margin
in the popular vote.<span style="mso-spacerun: yes;"> </span>Donald Trump had been
so clever to stoke fervor in those states with an inordinate representation in
the Electoral College.<span style="mso-spacerun: yes;"> </span>This author’s
home state of South Dakota is just one such jurisdiction.<span style="mso-spacerun: yes;"> </span>Despite a low population, South Dakota punches
above its weight with three Electoral College votes.<span style="mso-spacerun: yes;"> </span>Trump’s surprise win inspired a closer look
at demographics, economics and social trends on a state-by-state basis.<o:p></o:p></span></i></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><i><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">The analysis uncovered hate groups and tendencies to solve problems with
violence.<span style="mso-spacerun: yes;"> </span>When the post was first
published, some readers thought it nonsense. <span style="mso-spacerun: yes;"> </span>Fast forward to today, few would deny the
popularity of Donald Trump among members of hate groups.<span style="mso-spacerun: yes;"> </span>Videos of the U.S. Capital Building under siege
on January 6, 2021, make it clear that the Trump team solves problems with
violence.<span style="mso-spacerun: yes;"> </span>Donald Trump, with his tough
talk of revenge and dictatorship, continues to stoke the fire burning in the
bellies of hate groups. As a consequence, in November 2024 as it was in November 2016, it is all about HATE. <span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><i><span style="font-size: 13pt; line-height: 125%;"><o:p><span style="font-family: verdana;"> </span></o:p></span></i></p><p class="MsoNormal" style="margin-bottom: 10pt;"><i><span style="font-size: 13pt; line-height: 125%;"><o:p><span style="font-family: verdana;"><br /></span></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: normal;"><span style="font-family: verdana;"><span style="color: #333333; font-size: 13pt;">The 2016 presidential election was two months ago and one might
think it should be treated like so much water under the bridge. Yet last
week just one day after Trump took the oath of office, over a half million
people swarmed into Washington DC to remind the new president that his campaign
to ‘make America great again’ would not be allowed to roll over social and
economic progress made over the last few decades. Mostly women, they came
wearing pink hats and carrying signs against racism, sexism and hate.
Over 400 marches of the same sort were simultaneously held in communities
around the country.<span></span></span></span></p><a name='more'></a><span style="font-family: verdana;"><span style="color: #333333; font-size: 11pt;"><o:p></o:p></span></span><p></p>
<p class="MsoNormal" style="background: white; line-height: normal;"><span style="font-family: verdana;"><span style="color: #333333; font-size: 13pt;">Trump’s response - via Twitter of course
- was a snarky remark about how those marchers should have voted in the
presidential election. Actually, they probably did vote.
Unfortunately, their votes appeared to have counted for little.</span><span style="color: #333333; font-size: 11pt;"><o:p></o:p></span></span></p>
<p class="MsoNormal" style="background: white; line-height: normal;"><span style="font-family: verdana;"><span style="color: #333333; font-size: 13pt;">For the second time this century a U.S. president took the oath
of office without the support of the majority of voters. In 2000, Al Gore
won the popular vote in the presidential election by a very narrow margin of
537,520 votes. George W. Bush ended up as our president because he won
more than required minimum votes in the Electoral College, albeit with only one
vote to spare. In 2016, Hillary Clinton won the popular vote by a
whopping 2.9 million votes, giving her a 2.1% lead over Donald Trump. Of
course, we already know that the Electoral College delivered the win to Trump
instead, largely because smaller rural states have in inordinate influence over
the final Electoral College tally by virtue of the guaranteed minimum
representation. </span><span style="color: #333333; font-size: 11pt;"><o:p></o:p></span></span></p>
<p class="MsoNormal" style="background: white; line-height: normal;"><span style="font-family: verdana;"><i><span style="color: #333333; font-size: 13pt;">Who are the people in those small states with 3 and 4 electoral
votes that have had so much influence over the fortunes of our country?</span></i><span style="color: #333333; font-size: 11pt;"><o:p></o:p></span></span></p>
<p class="MsoNormal" style="background: white; line-height: normal;"><span style="font-family: verdana;"><span style="color: #333333; font-size: 13pt;">Plenty of politicians have already poured over the election
results, offering one opinion after another about who voted for Trump and why.
However, I wanted to consider the election in terms I could
understand. </span><span style="color: #333333; font-size: 11pt;"><o:p></o:p></span></span></p>
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhbC1fyQ_pbjBFn7PbJCp9vEj11nB8UvEXRA1YzizrcEdgPrOBPqITddU-DQl3vdG1kHV5iG1OloMFJNeaEI8iehszZuvVysEWpeAmXkXMdJJv61jRLTJ4Lg9A1g2Ju_oMuNKylq0KjloaAbj5eOKMMfcIMGxj1zsdpiI92u-SX_P9b51gzQjBFNg/s1575/States%20for%20Clinton-Trump%201-23-17.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1001" data-original-width="1575" height="203" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhbC1fyQ_pbjBFn7PbJCp9vEj11nB8UvEXRA1YzizrcEdgPrOBPqITddU-DQl3vdG1kHV5iG1OloMFJNeaEI8iehszZuvVysEWpeAmXkXMdJJv61jRLTJ4Lg9A1g2Ju_oMuNKylq0KjloaAbj5eOKMMfcIMGxj1zsdpiI92u-SX_P9b51gzQjBFNg/s320/States%20for%20Clinton-Trump%201-23-17.jpg" width="320" /></a></div><p class="MsoNormal" style="background: white; line-height: normal;"><span style="font-family: verdana;"><span style="color: #333333; font-size: 13pt;">On a nationwide basis, each of the 538 electoral votes accounts
for an average of 422,227 eligible voters. Electoral college members from
twenty-nine states and the District of Columbia represent fewer than the
average. These states and DC are shown in the graph. These are the
states that have inordinate influence over of the presidential election than is
warranted by the state’s population. To be clear, some of these
‘influential states’ voted for Hillary Clinton. Indeed, 25.4% of the
electoral votes for Clinton were from states that have a fewer than average
eligible voters per electoral college vote. However, 41.8% of electoral
votes for Trump were from these ‘influential states,’ making it very clear that
rural America held sway in Trump’s favor. </span><span style="color: #333333; font-size: 11pt;"><o:p></o:p></span></span></p>
<p class="MsoNormal" style="background: white; line-height: normal;"><span style="font-family: verdana;"><span style="color: #333333; font-size: 13pt;">I had some idea already of the rural character found in the
states that voted for Trump. My beginnings were on a cattle ranch in
South Dakota and I earned a bachelor degree in economics from the University of
South Dakota. Independent minded and hardworking, South Dakotans are
a tough bunch. Yet many people in the state are isolated and lack
experience with the sophisticated and sometimes sinister intrigues of more
worldly players. Yet to understand the 2016 Presidential Election
and the Women’s Marches, there is more to consider than nostalgic notions of
rural America.</span><span style="color: #333333; font-size: 11pt;"><o:p></o:p></span></span></p>
<p class="MsoNormal" style="background: white; line-height: normal;"><span style="font-family: verdana;"><span style="color: #333333; font-size: 13pt;">Having established which states made a difference in the
election in my own way, I looked at various social, demographic and economic
factors to understand better what might be coloring the view of these
voters. </span><span style="color: #333333; font-size: 11pt;"><o:p></o:p></span></span></p>
<p class="MsoNormal" style="background: white; line-height: normal;"><span style="color: #333333; font-size: 13pt;"><o:p><span style="font-family: verdana;"></span></o:p></span></p><div class="separator" style="clear: both; text-align: center;"><span style="font-family: verdana;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOveB9E_vp_vanYZIufBbDRjBXVU1frR5FnOJWJ5wu_K6i5fJlAyA3ps2ZOVV-qkrwNojcrj2JZAyen08jdzkaRrhrIZfJnAtRMDiS-tSWDznwQk2JgGmINlCrn6lS4PhFyp5QDY0mvfAeSuEFyQP7nYJpYXPIMthXhfuZqsnb-Q4gK1O6zPgXHQ/s1575/Labor%20Force%20Participation%201-23-17.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1001" data-original-width="1575" height="203" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOveB9E_vp_vanYZIufBbDRjBXVU1frR5FnOJWJ5wu_K6i5fJlAyA3ps2ZOVV-qkrwNojcrj2JZAyen08jdzkaRrhrIZfJnAtRMDiS-tSWDznwQk2JgGmINlCrn6lS4PhFyp5QDY0mvfAeSuEFyQP7nYJpYXPIMthXhfuZqsnb-Q4gK1O6zPgXHQ/s320/Labor%20Force%20Participation%201-23-17.jpg" width="320" /></a></span></div><span style="font-family: verdana;"><br /></span><span style="color: #333333; font-family: verdana; font-size: 13pt;">The labor participation rate tells an important part of the
story. For Trump 138 electoral votes out of his total of 336, were from
states where the labor force participation was below the average of
63.6%. That represented 45.1% of Trump’s total electoral votes.
However, 113 electoral votes for Clinton were from states that fell into that
same low employment status or 48.7% of her total electoral votes. While
there appears to be some connection, this data was simply not compelling enough
to say it explains the conundrum of how we have a president in the oval office
who is so unpopular.</span><p></p>
<p class="MsoNormal" style="background: white; line-height: normal;"><span style="font-family: verdana;"><span style="color: #333333; font-size: 13pt;">The intensity of the loss felt by some communities might provide
a better explanation. Instead of looking at labor participation, the
economic fortunes of each state can be understood through what each has lost in
terms of income. On average median household income in 2015 was down 7.8%
from the peak median income for the state. Some states are experiencing
double digit decreases in median income. Even if a population is largely
employed, if purchasing power is not what it used to be, voters are bound to
feel discontent.</span><span style="color: #333333; font-size: 11pt;"><o:p></o:p></span></span></p>
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEilCabA3fAud47nndB0Fs1n_zSOH9LZyeUQ0y2_HEJ8SCPuD0-FQu8HmFkSDqh70HVMAYWR1XPCyPYYXD0wC3-F-KdvReXufDJvC13wKmD_CGdjNryqv-QwWqWYQR_ycSmiNCiUTg4N7g1tYWVbRUKXm4GzUCSztWEjQOk4lnfXKMqKxzdGZUk9zw/s1566/Median%20Income%20Change%201-23-17.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="995" data-original-width="1566" height="203" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEilCabA3fAud47nndB0Fs1n_zSOH9LZyeUQ0y2_HEJ8SCPuD0-FQu8HmFkSDqh70HVMAYWR1XPCyPYYXD0wC3-F-KdvReXufDJvC13wKmD_CGdjNryqv-QwWqWYQR_ycSmiNCiUTg4N7g1tYWVbRUKXm4GzUCSztWEjQOk4lnfXKMqKxzdGZUk9zw/s320/Median%20Income%20Change%201-23-17.jpg" width="320" /></a></div><div style="text-align: center;"><br /></div>
<p class="MsoNormal" style="background: white; line-height: normal;"><span style="color: #333333; font-family: verdana; font-size: 13pt;">A look at a chart of ‘median income change from peak year’ makes
it clear that Trump’s message resonated well in states where median incomes
have dropped by significant amounts. Indeed, 178 of the electoral votes
for Trump were from states where median incomes fell by more than the average
7.8% from peak median income for that state. That represented 58.2% of
all electoral votes cast for Trump. By contrast, Clinton won only 85
electoral votes from states where income is down by more than the
average. These votes represented 36.7% of her total electoral college
votes. Thus ‘sense of loss’ seems to be a more direct driver of Trump’s
Electoral College victory than simply jobs.</span></p>
<p class="MsoNormal" style="background: white; line-height: normal;"><span style="font-family: verdana;"><span style="color: #333333; font-size: 13pt;">The obvious question is why have these states experienced such a
deep loss of income and why have they not recovered from the Great Recession of
2010-2012. Those of us who follow the small-cap sector have a good
understanding of what happens when small companies with their limited resources
are hit with adverse circumstances. Earnings losses are possible.
Bankruptcy is a reality. Recovery takes time. Weak balance sheets,
poorly trained workers, jaded managers or any of a dozen other deficiencies
slow things down. </span><span style="color: #333333; font-size: 11pt;"><o:p></o:p></span></span></p>
<p class="MsoNormal" style="background: white; line-height: normal;"><span style="font-family: verdana;"><i><span style="color: #333333; font-size: 13pt;">Do those states with deep reductions in income have such
deficiencies?</span></i><span style="color: #333333; font-size: 11pt;"><o:p></o:p></span></span></p>
<p class="MsoNormal" style="background: white; line-height: normal;"><span style="color: #333333; font-size: 13pt;"><span style="font-family: verdana;">There is no state balance sheet to analyze. However, the
corporate body could be considered a state’s asset base. Gross domestic
product has been a popular metric to help explain consumer and vote
dispositions. However, the presence of public companies provides an
interesting perspective on a state’s economy. Public companies require an
element of sophistication to meet shareholder and regulatory
requirements. Their financial records are audited and subjected to
scrutiny by the public. These companies must adopt codes of ethics and
standards of business conduct. Public companies are also central to job
creation. Thus, the more public companies in a state, the more resilient
the economy.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="background: white; line-height: normal; text-align: center;"><span style="color: #333333; font-size: 11pt;"><o:p><span style="font-family: verdana;"> </span></o:p></span></p><div class="separator" style="clear: both; text-align: center;"><span style="font-family: verdana;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiaMwVxXGtCQ_N40y3qBVUvG5pypimJgR7slk5aOtIMLAvl0KQQ3hh6YJFTpYLTAu6JYpPfWViVAIPl8y7eS-vyQznhhAmpQpZ6L_We2clERYvYLc3jICSHY3DmA0z8KRc5rYMV9kLPfJCWmbXAyaqDPW1VFVCJMr8e8wDGGHbPCEolTXAR4NUFsw/s1575/Exchange%20Listed%20Companies%201-23-17.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1001" data-original-width="1575" height="203" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiaMwVxXGtCQ_N40y3qBVUvG5pypimJgR7slk5aOtIMLAvl0KQQ3hh6YJFTpYLTAu6JYpPfWViVAIPl8y7eS-vyQznhhAmpQpZ6L_We2clERYvYLc3jICSHY3DmA0z8KRc5rYMV9kLPfJCWmbXAyaqDPW1VFVCJMr8e8wDGGHbPCEolTXAR4NUFsw/s320/Exchange%20Listed%20Companies%201-23-17.jpg" width="320" /></a></span></div><span style="font-family: verdana;"><br /></span><p></p>
<p class="MsoNormal" style="background: white; line-height: normal;"><span style="font-family: verdana;"><span style="color: #333333; font-size: 13pt;">Of course, the larger the state geographically or the more
endowed with natural resources, more public companies might expected. We
are looking beyond which state has the most public companies. Instead, we
are looking at whether there is a connection between corporate formation with
income recovery. However, the hypothesis does not seem to be borne
out. We can see in the graph of exchange listed companies that states
which had the greatest change in median income from the peak are also among
those with numerous public companies. Indeed, among those low-population
states with the inordinate amount of influence in Trump’s favor in the
Electoral College, public company formation seems to be quite robust.</span><span style="color: #333333; font-size: 11pt;"><o:p></o:p></span></span></p>
<p class="MsoNormal" style="background: white; line-height: normal;"><span style="font-family: verdana;"><span style="color: #333333; font-size: 13pt;">Households present another economic resource, but only if they
are fully functional. Something like a company with negative working
capital, income deficient households are ‘gut punched’ by adverse economic
events. On their backs, these households cannot contribute to economic
recovery. It is somewhat alarming that nationwide 14.9% of households are
below the poverty level. Interestingly, a good share of the states that
voted for Trump have even more beleaguered households, including Kentucky with
a whopping 19% of its households below the poverty level. This includes a
good share of those small states with inordinate influence over the 2016
election outcome relative to their population. </span><span style="color: #333333; font-size: 11pt;"><o:p></o:p></span></span></p>
<p class="MsoNormal" style="background: white; line-height: normal; text-align: center;"><span style="color: #333333; font-size: 13pt;"><o:p><span style="font-family: verdana;"></span></o:p></span></p><div class="separator" style="clear: both; text-align: center;"><span style="font-family: verdana;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi94R9AYracvSKLWtRbcfUJjCHBuxtAmIKxkC7F4fQJ11JGCKaQy2vIGtt7lg7jSF5JfpYtMySqvUCmgCz8ippY_KM8se9fl3HuixIqjtWtKGW8-br7sGqVY0XZ18tm7WZouklS2Wpfl5hle91lasbVgLrv-5sSOKV-uvPoyTcF2nYOypCx0STNVw/s1575/Poverty%20Level-Drug%20Use%201-23-17.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1001" data-original-width="1575" height="203" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi94R9AYracvSKLWtRbcfUJjCHBuxtAmIKxkC7F4fQJ11JGCKaQy2vIGtt7lg7jSF5JfpYtMySqvUCmgCz8ippY_KM8se9fl3HuixIqjtWtKGW8-br7sGqVY0XZ18tm7WZouklS2Wpfl5hle91lasbVgLrv-5sSOKV-uvPoyTcF2nYOypCx0STNVw/s320/Poverty%20Level-Drug%20Use%201-23-17.jpg" width="320" /></a></span></div><span style="font-family: verdana;"><br /></span><p></p>
<p class="MsoNormal" style="background: white; line-height: normal;"><span style="font-family: verdana;"><span style="color: #333333; font-size: 13pt;">Drug use has been cited as a factor related to workforce
participation. The graph illustrating households below the poverty level
also shows the percentage of the population that uses illegal drugs such as
heroin or cocaine. Nationwide approximately 8.5% of the population uses
illegal drugs. There appears to be an inverse relationship between
household income and drug use. It stands to reason that households in a
struggle to pay the rent and put food on the table would also have trouble
paying the local drug dealer.</span><span style="color: #333333; font-size: 11pt;"><o:p></o:p></span></span></p>
<p class="MsoNormal" style="background: white; line-height: normal;"><span style="font-family: verdana;"><span style="color: #333333; font-size: 13pt;">Companies recover from difficult times by tapping the talent of
their employees. They have contests to see who can come up with the best
money saving tactics and offer bonuses for product innovations. We can
look at the talent pool for each state from the same vantage point. How
strong is the talent pool in terms of education and ability to pursue
self-learning.</span><span style="color: #333333; font-size: 11pt;"><o:p></o:p></span></span></p>
<p class="MsoNormal" style="background: white; line-height: normal;"><span style="font-family: verdana;"><span style="color: #333333; font-size: 13pt;">While there is little difference among the states in terms of
attainment of high school education, there are significant differences in the
achievement of college degrees. There are far fewer college graduates in
those states where household incomes are lower. Indeed, in those states
where income is well off the peak there appears to be the fewest college
graduates as a percentage of the population. These are the states that
pinned their hopes to Trump baseball caps. In the other states education
may provide options for those who lose their jobs, allowing them to get back
into the workforce faster. In turn, this preserves household income.</span><span style="color: #333333; font-size: 11pt;"><o:p></o:p></span></span></p>
<p class="MsoNormal" style="background: white; line-height: normal;"><span style="color: #333333; font-size: 13pt;"><span style="font-family: verdana;">The Internet and mobile apps have changed nearly every
institution. It is no longer necessary to travel to a college campus to
get an education. Instead, students can take classes online. News
is no longer just on the radio or television. Mobile apps deliver news
from a host of new channels. This makes access to at least
the Internet an imperative for every household in order to be fully
participating members of our economy and society.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="background: white; line-height: normal; text-align: center;"><span style="color: #333333; font-size: 11pt;"><o:p><span style="font-family: verdana;"> </span></o:p></span></p><div class="separator" style="clear: both; text-align: center;"><span style="font-family: verdana;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjdmDLcFGTqHNNptiILU14lbntK7RYQ1x6cchIvOqr4eL7NTvCcGC3Wmi-RWnRXXBR-ASdPE1LJJt2q_vlghNE21x1OSeJ9BInIRIETpVDqRg0XDfyXYQxrCfxa3sAbHRu2BotLF9z7Myk2zYyjsvEWYcajcAvenoO0yV-lj1xVw_6KiqftQG4Gxg/s1575/Education%20Access%201-23-17.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1001" data-original-width="1575" height="203" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjdmDLcFGTqHNNptiILU14lbntK7RYQ1x6cchIvOqr4eL7NTvCcGC3Wmi-RWnRXXBR-ASdPE1LJJt2q_vlghNE21x1OSeJ9BInIRIETpVDqRg0XDfyXYQxrCfxa3sAbHRu2BotLF9z7Myk2zYyjsvEWYcajcAvenoO0yV-lj1xVw_6KiqftQG4Gxg/s320/Education%20Access%201-23-17.jpg" width="320" /></a></span></div><span style="color: #333333; font-family: verdana; font-size: 13pt;"> </span><p></p>
<p class="MsoNormal" style="background: white; line-height: normal;"><span style="font-family: verdana;"><span style="color: #333333; font-size: 13pt;">Surprisingly, an average 29.5% of households in the U.S. do not
have access to the Internet. As shown in the chart depicting educational
attainment, there are wide differences in across our country in terms of who
can jump on the ‘world wide web.’ We can see that among those states with
voters backing Trump, Internet access is lower. There does not seem to be
a particular link to state size, but connection to the Internet seems to be
lowest in those states with low income.</span><span style="color: #333333; font-size: 11pt;"><o:p></o:p></span></span></p>
<p class="MsoNormal" style="background: white; line-height: normal;"><span style="font-family: verdana;"><span style="color: #333333; font-size: 13pt;">Perhaps it is not so much capability of our labor force as it is
attitude. The final chart illustrates ‘attitude’ from two different
perspectives. The murder rate per capita can be a proxy for how violence
prone a community might be. Across the country the murder rate is near
four per capita. In those small states with the particular influence over
the outcome of the 2016 presidential election, the murder rates seem to be
lower than average with the exception of a couple of particularly violent
states like Louisiana and Mississippi. Additionally, in most of the
larger states that voted for Trump the murder rates are above the national
average. </span></span></p>
<p class="MsoNormal" style="background: white; line-height: normal;"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg1-Jbr_CCHWenkWIvxR0Ei6ewpnhJ9nnleeUrljhiO_zU8_ywFbidKR06qAE_UXpfvMQE7MDckCD0kBkhG4CR3i02dBDdVes7CVjV10cwHhtHAGR9as9sY4xxWA9OboTW6zjeX1yAxNRHuYWvoB72Y-FLU62WGaOyl2d8FOrV60SO_5RdpyggBGA/s1575/Violence%201-23-17.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1001" data-original-width="1575" height="203" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg1-Jbr_CCHWenkWIvxR0Ei6ewpnhJ9nnleeUrljhiO_zU8_ywFbidKR06qAE_UXpfvMQE7MDckCD0kBkhG4CR3i02dBDdVes7CVjV10cwHhtHAGR9as9sY4xxWA9OboTW6zjeX1yAxNRHuYWvoB72Y-FLU62WGaOyl2d8FOrV60SO_5RdpyggBGA/s320/Violence%201-23-17.jpg" width="320" /></a></div><div class="separator" style="clear: both; text-align: center;"><br /></div><div class="separator" style="clear: both; text-align: center;"><br /></div><span style="font-family: verdana;"><span style="color: #333333; font-size: 13pt;">Attitude can also be measured in terms of social groups that
advocate violence and extremism. The same chart depicts the number of
hate groups by state accordingly to the Southern Poverty Law Center.
Alaska and Hawaii are free of hate groups. Every other state has some
presence of Ku Klux Klan, Nazis, neo-Confederates or other groups organized
around hatred toward some segment of society. Obviously, those states
with higher population have more such groups than low population states.
It is somewhat alarming to see the incidence of hate groups among those states
where Trump garnered support. </span><span style="color: #333333; font-size: 11pt;"><o:p></o:p></span></span><p></p>
<p class="MsoNormal" style="background: white; line-height: normal;"><span style="font-family: verdana;"><span style="color: #333333; font-size: 13pt;">Even after a half dozen charts attempting to connect votes for
Trump and Clinton to demographic and economic factors, the analysis still seems
to fall short of a full explanation for the election outcome and why a half
million women marched through the streets of Washington DC to tell the victor
that he was not really a winner at all. However, the exercise shed some light on the angst felt by some people in our country. That is
something we all need to understand on any terms possible.</span><span style="color: #333333; font-size: 11pt;"><o:p></o:p></span></span></p>
<p class="MsoNormal" style="background: white; line-height: normal;"><span style="color: #333333; font-size: 11pt;"><o:p><span style="font-family: verdana;"> </span></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><i style="mso-bidi-font-style: normal;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Neither the author of the Small Cap Strategist web
log, Crystal Equity Research nor its affiliates have a beneficial interest in
the companies mentioned herein. <o:p></o:p></span></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><o:p><span style="font-family: verdana;"> </span></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><o:p><span style="font-family: verdana;"> </span></o:p></span></p><div class="separator" style="clear: both; text-align: center;"><br /></div><br /><div class="separator" style="clear: both; text-align: center;"><br /></div><br /><br />Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.com0tag:blogger.com,1999:blog-23359270.post-32832858213139084422023-12-29T07:00:00.001-05:002023-12-29T07:48:29.400-05:00Happy New Year!<p> </p><p style="text-align: center;"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEgZNBpSCPUgSxYiReF36f3TUpGrGwIOSIj7PtN9_xtX7I3aVgIWUGQm7n0xa3M3kxjaPAds3x1TiPEicRgHaCtbSG8Oo1kpNlGdmNnRBlHxHwnBxOuufRu3xqWbkkTQe8cPsAHW6XQPs-jrueNCyGzGqA209dgEDp7-uiGWXn3nJmxXMOfQ250G5A" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="1200" data-original-width="1920" height="200" src="https://blogger.googleusercontent.com/img/a/AVvXsEgZNBpSCPUgSxYiReF36f3TUpGrGwIOSIj7PtN9_xtX7I3aVgIWUGQm7n0xa3M3kxjaPAds3x1TiPEicRgHaCtbSG8Oo1kpNlGdmNnRBlHxHwnBxOuufRu3xqWbkkTQe8cPsAHW6XQPs-jrueNCyGzGqA209dgEDp7-uiGWXn3nJmxXMOfQ250G5A" width="320" /></a></div><br /><br /><p></p><p><br /></p><p><br /></p><p style="text-align: center;"><span style="font-family: Charter, Charter-robotoFallback, Charter-localFallback, Georgia, Times, serif; font-size: 19px;">"Learn from yesterday, </span></p><p style="text-align: center;"><span style="font-family: Charter, Charter-robotoFallback, Charter-localFallback, Georgia, Times, serif; font-size: 19px;">live for today, </span></p><p style="text-align: center;"><span style="font-family: Charter, Charter-robotoFallback, Charter-localFallback, Georgia, Times, serif; font-size: 19px;">hope for tomorrow." </span></p><p style="text-align: center;"><span style="font-family: Charter, Charter-robotoFallback, Charter-localFallback, Georgia, Times, serif; font-size: 19px;"> — Albert Einstein</span></p><p style="text-align: center;"><span style="font-family: Charter, Charter-robotoFallback, Charter-localFallback, Georgia, Times, serif; font-size: 19px;"><br /></span></p><p style="text-align: center;"><span style="font-family: Charter, Charter-robotoFallback, Charter-localFallback, Georgia, Times, serif; font-size: 19px;"><br /></span></p><p style="text-align: left;"><span style="font-family: Charter, Charter-robotoFallback, Charter-localFallback, Georgia, Times, serif;"><i><span style="font-size: x-small;">Image: wallpapers13.com</span></i></span></p>Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.com0tag:blogger.com,1999:blog-23359270.post-6811869098649631422023-12-22T12:00:00.001-05:002023-12-23T21:40:12.435-05:00A Prayer for Peace<p> </p><p style="text-align: center;"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEijSwCYDStlNduCfXGe7lxVQBYroVZQZU0L0mpOQKUl6HFv4Si_FAjApmrmDmr3rG8114ofMZLSAzYtD7WL4ptz5pN9UCuJeVG7RY73iN_SSoPGlWLZ_f2WpN_FsP1rUcc6Pg4SMQu-lrpyOsUK3G58cCgJB-DI1_znmGrsuhjU45LNaQXs6N9fTw" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="720" data-original-width="587" height="240" src="https://blogger.googleusercontent.com/img/a/AVvXsEijSwCYDStlNduCfXGe7lxVQBYroVZQZU0L0mpOQKUl6HFv4Si_FAjApmrmDmr3rG8114ofMZLSAzYtD7WL4ptz5pN9UCuJeVG7RY73iN_SSoPGlWLZ_f2WpN_FsP1rUcc6Pg4SMQu-lrpyOsUK3G58cCgJB-DI1_znmGrsuhjU45LNaQXs6N9fTw" width="196" /></a></div><br /><br /><p></p><p><br /></p><p style="text-align: center;"><span style="font-family: verdana;"><i>Now, Great Shepherd, come to our aid!</i></span></p><p style="text-align: center;"><span style="font-family: verdana;"><i>Grant us peace, teach us peace;</i></span></p><p style="text-align: center;"><span style="font-family: verdana;"><i>Guide our steps in the way of peace. </i></span></p><p style="text-align: center;"><span style="font-family: verdana;"><i>Open our eyes and our hearts,</i></span></p><p style="text-align: center;"><span style="font-family: verdana;"><i>and give us the courage to say: 'Never again war!'</i></span></p><p style="text-align: center;"><span style="font-family: verdana;"><i>With war everything is lost.</i></span></p><p style="text-align: center;"><span style="font-family: verdana;"><i>Instill in our hearts the courage to take real steps to achieve peace.</i></span></p><p style="text-align: center;"><br /></p><p style="text-align: center;"><br /></p><blockquote style="border: none; margin: 0 0 0 40px; padding: 0px;"><p style="text-align: left;"><span style="font-family: verdana; font-size: medium;">Dear Friends,</span></p></blockquote><p style="text-align: center;"><span style="font-family: verdana;">If Jesus were born today, </span></p><p style="text-align: center;"><span style="font-family: verdana;">he would arrive to the sounds of bombs and automatic weapons. </span></p><p style="text-align: center;"><span style="font-family: verdana;">Mary and Joseph would have to shelter their newborn </span></p><p style="text-align: center;"><span style="font-family: verdana;">amongst the concrete rubble and ash from continuous fighting. </span></p><p style="text-align: center;"><span style="font-family: verdana;">Would he survive? Can they live to take him to a safe place?</span></p><p style="text-align: center;"><span style="font-family: verdana;">These are questions being asked today by residents of </span></p><p style="text-align: center;"><span style="font-family: verdana;">Bethehem, which is located in the Israeli-occupied West Bank. </span></p><p style="text-align: center;"><span style="font-family: verdana;">For many the answer is no.</span></p><p style="text-align: center;"><span style="font-family: verdana;">Hundreds of babies have already died in the recent war in Gaza.</span></p><p style="text-align: center;"><span style="font-family: verdana;">Too many in positions of power are unwilling </span></p><p style="text-align: center;"><span style="font-family: verdana;">to give up their lust for power and revenge, </span></p><p style="text-align: center;"><span style="font-family: verdana;">reluctant ensure the safety of babies and children.</span></p><p style="text-align: center;"><span style="font-family: verdana;">Our path to peace leads away from such 'stiff necked people' </span></p><p style="text-align: center;"><span style="font-family: verdana;">and toward the light of God.</span></p><p style="text-align: center;"><span style="font-family: arial;"><br /></span></p><p style="text-align: center;"><span style="font-family: arial;"><br /></span></p>Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.com0tag:blogger.com,1999:blog-23359270.post-85286920808983608262023-11-22T08:34:00.005-05:002023-11-22T08:35:36.998-05:00Holiday Wishes<p style="text-align: center;"> </p><p style="text-align: center;"><span style="color: #7f6000; font-size: large;">HAPPY THANKSGIVING</span></p><p style="text-align: center;"><span style="color: #7f6000; font-size: large;"><br /></span></p><p style="text-align: center;"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEjI8lMvGlfTk2Je3Mln9bV7hOwu1eD4Uk0WQ9dkQCQS704jylJxRHjutNoDD3cLINNlGP9jhUTOLivKViaehuLzca1DTe0OhkayZXyeX9AOOGoxOe6kriUVB1ncFf07EsYA2kHcTK1AoCpEaRQ0k6RxAtEqPALYMyyjxAo2KyAYCdyo2zvOq0GBnw" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="720" data-original-width="720" height="400" src="https://blogger.googleusercontent.com/img/a/AVvXsEjI8lMvGlfTk2Je3Mln9bV7hOwu1eD4Uk0WQ9dkQCQS704jylJxRHjutNoDD3cLINNlGP9jhUTOLivKViaehuLzca1DTe0OhkayZXyeX9AOOGoxOe6kriUVB1ncFf07EsYA2kHcTK1AoCpEaRQ0k6RxAtEqPALYMyyjxAo2KyAYCdyo2zvOq0GBnw=w400-h400" width="400" /></a></div><p style="text-align: center;"><br /></p><p style="text-align: center;"><br /></p><span style="font-family: helvetica; font-size: medium;"><div style="text-align: center;">At a time when many go hungry or alone, </div></span><p></p><p style="text-align: center;"><span style="font-family: helvetica; font-size: medium;">a prayer for a full plate and warm fellowship.</span></p><p style="text-align: center;"><span style="font-family: helvetica; font-size: medium;"><br /></span></p><p style="text-align: center;"><span style="font-family: helvetica; font-size: medium;">The Associates at Crystal Equity Research</span></p><p style="text-align: center;"><span style="font-family: helvetica; font-size: medium;"><br /></span></p><p style="text-align: center;"><span style="font-family: helvetica; font-size: medium;"><br /></span></p><p style="text-align: center;"><span style="font-family: helvetica; font-size: medium;"><br /></span></p><p style="text-align: center;"><span style="font-family: helvetica; font-size: medium;"><br /></span></p><p style="text-align: center;"><span style="font-family: helvetica; font-size: medium;"> </span><br /><br /></p>Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.com0tag:blogger.com,1999:blog-23359270.post-875911344110800412023-08-25T16:05:00.047-04:002023-09-05T16:42:17.837-04:00Two Ways to Play SGBX<p style="text-align: left;"><span style="color: #38761d; font-family: verdana; font-size: x-large;"><span style="background-color: white;"> </span><span style="background-color: #d9ead3;"> </span><span style="background-color: #d9ead3;"> </span><span style="background-color: #d9ead3;"> </span><span style="background-color: #d9ead3;"> </span><span style="background-color: #d9ead3;"> PRIME SERIES</span><span style="background-color: #d9ead3;"> <span> </span> </span><span style="background-color: #d9ead3;"> </span><span style="background-color: #d9ead3;"> </span><span style="background-color: #d9ead3;"> </span></span></p><p><span style="font-family: verdana;"><br /></span></p><p class="MsoNormal" style="margin-bottom: 10.0pt; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo1; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: verdana;"><span style="font-size: 13pt; line-height: 125%;">·<span style="font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variation-settings: normal; line-height: normal;"> </span></span><span style="font-size: 13pt; line-height: 125%;">Hot target markets with strong
demand as both commercial and residential housing stocks in short supply following
economic impacts of pandemic, business interruption.<o:p></o:p></span></span></p><p class="MsoNormal" style="margin-bottom: 10.0pt; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo1; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: verdana;"><span style="font-size: 13pt; line-height: 125%;">·<span style="font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variation-settings: normal; line-height: normal;"> </span></span><span style="font-size: 13pt; line-height: 125%;">Proprietary modular construction process
saves time, labor and materials costs, enhancing profit margins in real estate
development projects.<o:p></o:p></span></span></p><p class="MsoNormal" style="margin-bottom: 10.0pt; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo1; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: verdana;"><span style="font-size: 13pt; line-height: 125%;">·<span style="font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variation-settings: normal; line-height: normal;"> </span></span><span style="font-size: 13pt; line-height: 125%;">Proposed sale of key land
investment could capture significant returns, secure capital for future real
estate development projects. <o:p></o:p></span></span></p><p class="MsoNormal" style="margin-bottom: 10.0pt; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo1; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: verdana;"><span style="font-size: 13pt; line-height: 125%;">·<span style="font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variation-settings: normal; line-height: normal;"> </span></span><span style="font-size: 13pt; line-height: 125%;">Milestones expected in development
projects could provide valuation catalysts in near-term.<o:p></o:p></span></span></p><p><span style="font-family: verdana;">
</span></p><p class="MsoNormal" style="margin-bottom: 10.0pt; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo1; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: verdana;"><span style="font-size: 13pt; line-height: 125%;">·<span style="font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variation-settings: normal; line-height: normal;"> </span></span></span><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Spin-off of development subsidiary
gives investors an alternative to exploit undervalued stock.</span><span style="font-family: Roboto;"><o:p></o:p></span></span></p><p><span style="font-family: verdana;"><br /></span></p><p><span style="font-family: verdana;"><span style="font-size: 13pt;"><a href="https://ir.safeandgreenholdings.com/" target="_blank"><b><span style="color: #38761d;">Safe & Green
Holdings (SGBX: Nasdaq)</span></b></a> delivers exactly what its name suggests</span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;">-</span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;">high
quality, environmentally sound buildings and components.</span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;">The Company exploits repurposed and recycled
materials and completes manufacturing in controlled and efficient central
location.</span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;">Minimal assembly work on location
reduces site disruption and saves as much as 50% of construction time. </span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;">The arrangement makes it possible to offer more
durable and lower cost buildings compared to conventional construction methods.
</span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;"> </span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">The Company’s ‘Safe
and Green’ modular buildings and components have been certified by The ICC
Evaluation Services as meeting the International Building Code and Residential
Code as well as stringent building standards in California and Florida. <span style="mso-spacerun: yes;"> </span>The Company could be the first modular
building producer to receive such certification, a status which could give Safe
& Green a clear competitive advantage in the construction market. Additionally,
structures that incorporate the Company’s modular design with recycled materials
can potentially earn points for LEED certification (Leadership in Energy and Environmental
Design).<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><u><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Its Own Best
Customer<o:p></o:p></span></span></u></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj2SrTQOWuobkomVB4U7CIfoVa3I7ZV9OtGmiCyv4slerwsl6SsjJprF7AzpdLQkxudI9fQSk-OLBSFz5HwdZWoTX4SsVXbeBY340cY2BuYDqYU73KCMH3d-9SGnyaAoQnOGqY3QpG-3p_9H9OTRf9ZKNspwhGGUgUHA547Pe40mkfqFiVZOfdL8A/s939/SGBX%20Modular%20Structure.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="671" data-original-width="939" height="229" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj2SrTQOWuobkomVB4U7CIfoVa3I7ZV9OtGmiCyv4slerwsl6SsjJprF7AzpdLQkxudI9fQSk-OLBSFz5HwdZWoTX4SsVXbeBY340cY2BuYDqYU73KCMH3d-9SGnyaAoQnOGqY3QpG-3p_9H9OTRf9ZKNspwhGGUgUHA547Pe40mkfqFiVZOfdL8A/s320/SGBX%20Modular%20Structure.jpg" width="320" /></a></div><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Safe & Green
sells its products directly to third parties such as construction companies,
architects, and builders, among others developing real estate for commercial or
residential use.<span style="mso-spacerun: yes;"> </span>Most recently, the Company
sold an additional thirty-eight modular structures to an unnamed customer,
which has deployed units from an earlier order across multiple states in the
U.S.<span style="mso-spacerun: yes;"> </span>The follow-on order is valued at
$2.5 million, representing approximately $65,000 per unit.<span><a name='more'></a></span><o:p></o:p></span></span><p></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">The Company has
been developing its own residential properties, using its proprietary modular
construction units to build brand distinction and add value.<span style="mso-spacerun: yes;"> </span>The company has used metal shipping containers,
converting the rectangles to meet the needs of customers for housing or office
space. <span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>However, the company’s manufacturing arm, SG
Echo, has gone far beyond container conversions.<span style="mso-spacerun: yes;"> </span>A mix of wood and steel is used to fabricate
the Company’s exclusive designs at a central manufacturing site.<span style="mso-spacerun: yes;"> </span>The units are then assembled onsite and given
final finishing touches.<br /><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><u><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Favorable Demand
Trends in Target Markets<o:p></o:p></span></span></u></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">The Company may be
approaching the market at exactly the right time.<span style="mso-spacerun: yes;"> </span>Higher costs for construction materials and
labor as well as interest rate hikes motivate real estate developers to find
lower-cost alternatives. <span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Supply side cost
pressures are intensifying just as the U.S. is experiencing a crunch in housing
stock.<span style="mso-spacerun: yes;"> </span>There is a shortage in residential
homes, particularly for the middle market.<span style="mso-spacerun: yes;">
</span>According to the National Association of Realtors, the U.S. housing
market is short more than 300,000 affordable single-family homes of middle-income
buyers.<span style="mso-spacerun: yes;"> </span>Down market there appears to
be an even more acute supply deficit.<span style="mso-spacerun: yes;"> </span>According
to the National Low Income Housing Coalition, there is a shortage of 7.3
million rental homes that are affordable and available to rental householders after
the U.S. lost approximately 8% of the total affordable housing units following the
Covid 2019 pandemic.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><u><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Capital for Growth<o:p></o:p></span></span></u></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">The Safe &
Green team is ready to fill in the housing market gap, an ambition that requires
capital. <span style="mso-spacerun: yes;"> </span>Safe & Green had $1.6 million
in its bank account at the end of June 2023 to fuel its growth plans, that is
after providing support for operations.<span style="mso-spacerun: yes;"> </span>The
Company has not yet achieved profitability with operations tapping cash
resources for $3.0 million in the first six months of 2023.<span style="mso-spacerun: yes;"> </span>That implies a cash burn rate near a half
million per month.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">The cash kitty could
be boosted in the near-term by the sale of its Lago Vista property in Texas.<span style="mso-spacerun: yes;"> </span>At least one offer near $12.5 million has
been received based on the Company announcement in June 2023 of a letter of
intent.<span style="mso-spacerun: yes;"> </span>The offer could be a
compelling win for Safe & Green that compares favorably with the present
value of future development projects. <span style="mso-spacerun: yes;"> </span>The
company originally paid $3.6 million for the property in 2021, and invested another
$824,231 to smart it up.<span style="mso-spacerun: yes;"> </span>With a book
value of $4.4 million, the math suggests an astute move by Safe & Green management
to monetize a real asset. <span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Some investors
might be disappointed the Company may not go so far as to develop the project
with its modular building units. This author’s recent conversation with Safe &
Green management via video conference call suggested the Company is seeking the
right deal, even one that could involve a development pact and the Company’s modular
structures. <o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><u><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Strategic Restructure
Plan<o:p></o:p></span></span></u></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">If investors are
scratching their heads over selling good property before it is developed, they
must be really perplexed with plans to spin off the development subsidiary from
the Safe & Green parent.<span style="mso-spacerun: yes;"> </span>Safe &
Green Development Corporation is to become a stand-alone public company with
shares listed on Nasdaq.<span style="mso-spacerun: yes;"> </span>The company plans
to retain ownership of 70% of the shares and distribute 30% of the shares to SGBX
holders.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">A fairness
opinion commissioned by the Company pegs the standalone value of its
development subsidiary at $74 million, suggesting the stock distribution to shareholders
could be valued at approximately $22.2 million.<span style="mso-spacerun: yes;">
</span>This presents an interesting setup given that the parent’s entire value
represented by the market cap of SGBX shares that has ranged from $12 million
to $26 million over the last six months. <o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><u><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Complex Business
Model Frustrates Fair Valuation<o:p></o:p></span></span></u></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">The problem is, Safe
& Green leadership believes the Company has not been getting fair treatment
in the U.S. equity market.<span style="mso-spacerun: yes;"> </span>Complexity
could be the wrench in the works and the SG DevCo spinout could help simplify the
Company profile.<span style="mso-spacerun: yes;"> </span>Indeed, the company has
a mix of business models under one roof.<span style="mso-spacerun: yes;">
</span>Property development and manufacturing are just two of them.<span style="mso-spacerun: yes;"> </span>Safe & Green also deploys specialized
modular units for medical testing.<span style="mso-spacerun: yes;"> </span>A
fourth business is service oriented, collecting and treating medical waste for
disposal.<span style="mso-spacerun: yes;"> </span>Investors may simply not want
to do the extra work to fully understand or value each business component.<span style="mso-spacerun: yes;"> <br /> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;"></span></span></p><div class="separator" style="clear: both; text-align: center;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiZ1dB4GX92o8LPoALgZqqfh3B7g7AE6jtK1yPRepK3mIRzPSO1IzKChp6N6KeHwVx4lsE2PE1HkovgcY5cHck_zswDk3L8RPIdFjof7Npj2cn08B9RZDZrT-L_Av9HfHxEt4FRMVSIDZ4dwjce5IaiV0AyEHPIEQEJFDZ5C_HbX3UuPhpj6O56vA/s747/SGBX%20Modular%20Health%20Care%20Structure.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="608" data-original-width="747" height="260" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiZ1dB4GX92o8LPoALgZqqfh3B7g7AE6jtK1yPRepK3mIRzPSO1IzKChp6N6KeHwVx4lsE2PE1HkovgcY5cHck_zswDk3L8RPIdFjof7Npj2cn08B9RZDZrT-L_Av9HfHxEt4FRMVSIDZ4dwjce5IaiV0AyEHPIEQEJFDZ5C_HbX3UuPhpj6O56vA/s320/SGBX%20Modular%20Health%20Care%20Structure.jpg" width="320" /></a></span></span></div><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Granted the healthcare
sector is robust and represents steady demand. <span style="mso-spacerun: yes;"> </span>Capturing the low-hanging fruit from a
particular vertical, in this case the medical field, could elevate the Safe
& Green brand for uses of its modular building units in other sectors.<span style="mso-spacerun: yes;"> </span>However, successful penetration of the health
care market requires an entirely different business development effort than real
estate development or building module manufacturing. <span style="mso-spacerun: yes;"> </span>It is noteworthy that Safe & Green leadership
is well experienced and knowledgeable in the healthcare sector.<span style="mso-spacerun: yes;"> </span>However, their unique qualifications may not
be clearly evident to investors. <o:p></o:p></span></span><p></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><u><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">A View on the Spin
Out Proposal<o:p></o:p></span></span></u></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Spinning out the
development subsidiary to a separate company with its own stock may have
multiple benefits.<span style="mso-spacerun: yes;"> </span>As a standalone
operation, analysis is simplified.<span style="mso-spacerun: yes;"> </span>The drivers
of value will hinge on property acquisition, partnership formation, cost
controls, construction management, and marketing<span style="mso-spacerun: yes;"> </span>-<span style="mso-spacerun: yes;"> </span>all
for real estate development.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Perhaps more
importantly, out of the shadow of the parent, the SG DevCo management team might
find new inspiration and energy, building reputation, creating brand awareness
and accelerating growth.<span style="mso-spacerun: yes;"> </span>SG DevCo has
reported a robust project development pipeline valued at over $800 million over
the next seven years.<span style="mso-spacerun: yes;"> </span>A newly energized
team could glean even more than the $200 million in potential returns that have
been predicted for the portfolio.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">The parent operations
could also get a valuation boost.<span style="mso-spacerun: yes;"> </span>As noted
above the Safe & Green parent is retaining a 70% stake in SG DevCo.<span style="mso-spacerun: yes;"> </span>The majority equity stake will still be represented
on the Safe & Green financial reports.<span style="mso-spacerun: yes;">
</span>Like all other shareholders, the parent will benefit from improved
financial performance at SG Dev Co as well as any shift to a fairer valuation
for the development business.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Furthermore, the
spinout could strengthen the Safe & Green parent’s capital position.<span style="mso-spacerun: yes;"> </span>In the future, the parent may be able to monetize
its equity stake in SG Dev Co, securing new capital for its own strategic
growth plans. <span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><u><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Call to Action<o:p></o:p></span></span></u></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">It would appear
the Is are all dotted and Ts crossed for the SG DevCo spinout.<span style="mso-spacerun: yes;"> </span>The Securities and Exchange Commission has
given its approval.<span style="mso-spacerun: yes;"> </span>A record date of September
8, 2023, has been set for the stock distribution.<span style="mso-spacerun: yes;"> </span>Setting the record date calls shareholders
and prospective investors to action.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">First choice is
to take a long position in SGBX before the September 8<sup>th</sup> record date
and receive the stock distribution of SG DevCo. <span style="mso-spacerun: yes;"> </span>The move gives shareholders stakes in two companies
and optionality in future profit taking.<span style="mso-spacerun: yes;">
</span>Shareholders of the parent would receive 0.93 shares of SG Dev Co for
every 5 shares of SGBX share.<span style="mso-spacerun: yes;"> </span>Shares of
the two separate companies could appreciate at different rates, leading
shareholders to hold one and take profits in the other.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Those ignoring
the spin out record date will not be left behind as a second alternative is to
grab shares of SGBX and participate in the fortunes of SG DevCo through the parent’s
retained ownership.<span style="mso-spacerun: yes;"> </span>If an opportunity arises
later to accumulate shares of SG DevCo at a compelling price, investors can increase
exposure to the development business with direct ownership of its shares.<span style="mso-spacerun: yes;"> </span>On a cautionary note, at least initially, trading
volume in shares of SG DevCo could be somewhat shallow given that only 30% of
issued shares will be in the public flotation.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><u><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">Risks<o:p></o:p></span></span></u></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">The Safe &
Green opportunity is not for investors without tolerance for risk.<span style="mso-spacerun: yes;"> </span>The shares of SG DevCo will be entirely
unseasoned and will not have the benefit of a ‘roadshow’ period to introduce
the shares to investors.<span style="mso-spacerun: yes;"> </span>Even the parent
company shares carry elements of hazard.<span style="mso-spacerun: yes;">
</span>The bid-ask spread represents 2.2% of the current share price.<span style="mso-spacerun: yes;"> </span>The immediately trim-off of capital value is
even more concerning given low trading volume near 55,000 shares per day.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">The Company is
not yet profitable and needs cash resources to support operations in the
near-term.<span style="mso-spacerun: yes;"> </span>As noted above the Company
has enough cash in the bank at the end of June to support operations for at
least three months based on the recent cash burn rate.<span style="mso-spacerun: yes;"> </span>A dwindling bank balance has put Safe &
Green’s management in the hot seat.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">There are plans
in the works to monetize one of the Company’s plum real estate assets, which could
provide adequate cash to support operations through to profitability. <span style="mso-spacerun: yes;"> </span>However, in the current economic environment
with rising interest rates could present obstacles to a timely closing of any
deal.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;">It is notable
that the Company recently filed a registration statement for the sale of up to
$50.0 million in equity or debt securities.<span style="mso-spacerun: yes;">
</span>It could mean fast cash for the Company , but the sale of common stock
or warrants could be dilutive for shareholders.<span style="mso-spacerun: yes;">
</span>Debt issuance would preserve the equity position for existing
shareholders, but the interest burden could weigh common stock value.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><o:p><span style="font-family: verdana;"> </span></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 13pt; line-height: 125%;"><o:p><span style="font-family: verdana;"> </span></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><i style="mso-bidi-font-style: normal;"><span style="font-size: 13pt; line-height: 125%;"><span style="color: #38761d; font-family: verdana;">Neither the author of the Small Cap
Strategist web log, Crystal Equity Research nor its affiliates have a
beneficial interest in the companies mentioned herein. <o:p></o:p></span></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><i style="mso-bidi-font-style: normal;"><span style="font-size: 13pt; line-height: 125%;"><span style="font-family: verdana;"><span style="color: #38761d;">Underwriters of the Prime series may
have a beneficial interest in, serve as agents of, or act as advisors to the
companies mentioned herein.</span><span style="color: #4f6228;"><o:p></o:p></span></span></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><i style="mso-bidi-font-style: normal;"><span style="font-size: 13pt; line-height: 125%;"><o:p><span style="font-family: verdana;"> </span></o:p></span></i></p><p class="MsoNormal" style="margin-bottom: 10pt;"><i style="mso-bidi-font-style: normal;"><span style="font-size: 13pt; line-height: 125%;"><o:p><span style="color: #38761d; font-family: verdana;">This article also appears on the financial information platform, Seeking Alpha, at the following URL: </span></o:p></span></i></p><p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-size: 17.3333px; line-height: 125%;"><o:p><span style="color: #38761d; font-family: verdana;"><i>https://seekingalpha.com/article/4632859-safe-and-green-two-ways-to-play-real-estate-development</i></span></o:p></span></p>Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.com0tag:blogger.com,1999:blog-23359270.post-11005459611721828052023-01-06T18:00:00.024-05:002023-01-22T18:05:30.339-05:00The Other Fusion<p><span style="font-family: Roboto; font-size: 13pt;">Mention ‘fusion’
and most people will first think you are talking about a new restaurant. </span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">Only a few techy types who read scientific
journals will pick up on a cutting-edge technology for power generation.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">Fusion is a type of nuclear reaction, but
unlike the nuclear power already in use wherein atoms are broken apart, through
fusion reaction energy is created by smashing together two atoms at high speed.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">Triggering such atom collisions requires
tremendous heat.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">Thus far, scientists
have had difficulty finding a heat process that generates more energy from the
fusion reaction than it takes to spark it.</span><span style="font-family: Roboto; font-size: 13pt;">
</span><span style="font-family: Roboto; font-size: 13pt;">The challenge is called ‘energy gain.’</span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">It is not like
mankind does not already have a perfect fusion example to use as a model.<span style="mso-spacerun: yes;"> </span>Fusion reactions can be found naturally in
the core of stars.<span style="mso-spacerun: yes;"> </span>Indeed, at the core
of our own Sun hydrogen atoms combine to make heavier elements like helium with
the resulting power bathes Earth and its neighboring planets in light and heat.
<span style="mso-spacerun: yes;"> </span>Duplicating that in a controlled process
is proving a tough nut to crack.<span></span></span></p><a name='more'></a><o:p></o:p><p></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEh4dzGl8y5kcuRPL3jRCkyY9lc4xdM1bNipEcMur2whY_ZTCeo59vd9Z0BdDuetU2axwTTAQjIqZBdrkMsRrW6CcsLSPrwhw24KYQsrM9qhqLFQTRaztIdKXhwYDrwWNcxjT5-CrPmIyV3SZaEU6Yn2BHYSOTuUvsKwJvIzCf6g2_49eE0iosI" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="" data-original-height="1388" data-original-width="2220" height="200" src="https://blogger.googleusercontent.com/img/a/AVvXsEh4dzGl8y5kcuRPL3jRCkyY9lc4xdM1bNipEcMur2whY_ZTCeo59vd9Z0BdDuetU2axwTTAQjIqZBdrkMsRrW6CcsLSPrwhw24KYQsrM9qhqLFQTRaztIdKXhwYDrwWNcxjT5-CrPmIyV3SZaEU6Yn2BHYSOTuUvsKwJvIzCf6g2_49eE0iosI" width="320" /></a></div><span style="font-size: 13pt;">There is renewed
confidence that a nutcracker could be at hand.</span><span style="font-size: 13pt;">
</span><span style="font-size: 13pt;">In early December 2022, the National Ignition Facility (NIF) in
California announced a breakthrough in achieving energy gain – i.e. more energy
produced that used in a fusion process.</span><span style="font-size: 13pt;">
</span><span style="font-size: 13pt;">In the NIF laboratory 2.05 megajoules of laser light was focused on a
capsule of fusion fuel, sparking an explosion that produced 3.15 megajoules of
energy.</span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;">Scientists the world over
celebrated!</span><p></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Why is everyone
so excited?<span style="mso-spacerun: yes;"> </span>Fission-driven nuclear reaction
represents a potentially ample source of energy that is carbon-free and nearly
waste free.<span style="mso-spacerun: yes;"> </span>If an energy-gaining process
can be scaled up to mass energy production, human kind may be able to avoid the
worst of the environmental crises triggered by combustion of fossil fuels.<span style="mso-spacerun: yes;"> </span>Fusion is also quite efficient, requiring
one-millionth of the fuel mass needed to produce the same amount of energy as a
coal-fired power plant. <span style="mso-spacerun: yes;"> </span>Favored fuels
for fusion are also quite abundant and inexpensive. <span style="mso-spacerun: yes;"> </span>Thus fusion is potentially a low-cost source
for energy for heating and lighting our homes and powering transportation<span style="mso-spacerun: yes;"> </span>-<span style="mso-spacerun: yes;"> </span>if
the right technology can be developed.<span style="mso-spacerun: yes;"> </span>So
far, nuclear fusion reactors come with a fairly high price tag. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">There is also
reason for investors to be excited.<span style="mso-spacerun: yes;"> </span>Surprisingly,
a number of commercial companies have been involved in fusion research and
development.<span style="mso-spacerun: yes;"> </span>Our due diligence has found
at least 40 companies with active fusion development projects.<span style="mso-spacerun: yes;"> </span>Participation by private companies in fusion
development may be related to the availability of financing. Institutional
investment in fusion power development was off a bit in the year 2022, but
venture capital and private equity funds still laid out $1 billion in the year
to keep fusion projects moving forward.<span style="mso-spacerun: yes;">
</span>This compares to $2.6 billion funneled into fusion project by savvy investors
in the year 2021. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><i><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">With commercial
companies in the thick of fusion work there is potentially an investment gain available to investors right
along with energy gain.</span></i><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><span style="mso-spacerun: yes;">
</span><i>In the next few posts we will explore the companies already involved
in fusion research and development.<span style="mso-spacerun: yes;"> </span>We
will take closer look at the science behind fusion and explore which companies could
be good investment targets.</i> <span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><i style="mso-bidi-font-style: normal;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Neither the author of the Small Cap Strategist web
log, Crystal Equity Research nor its affiliates have a beneficial interest in
the companies mentioned herein. <o:p></o:p></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.com14tag:blogger.com,1999:blog-23359270.post-39302516132576596022022-12-30T07:00:00.020-05:002022-12-31T20:18:32.472-05:00Toast for the New Year!<p style="text-align: center;"> </p><p style="text-align: center;"><br /></p><p style="text-align: center;"></p><div class="separator" style="clear: both; text-align: center;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEgPjrV_arlskJQcNGox_1oM_Bj55UJxCytYTk8yRbFpgnHJAesL82r6Oz5bMeV9plMxN1AXTcx18p5Je87NFY9KVn39USIA3Hb8vKDClugaNdCw_FO4_I_Q5s9jkFOWXf1cohUvAIoCTV_pMs1gEORFx4E05LzvHfKXRfu5_M9scAJ5hHYy4Uo" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="715" data-original-width="853" height="336" src="https://blogger.googleusercontent.com/img/a/AVvXsEgPjrV_arlskJQcNGox_1oM_Bj55UJxCytYTk8yRbFpgnHJAesL82r6Oz5bMeV9plMxN1AXTcx18p5Je87NFY9KVn39USIA3Hb8vKDClugaNdCw_FO4_I_Q5s9jkFOWXf1cohUvAIoCTV_pMs1gEORFx4E05LzvHfKXRfu5_M9scAJ5hHYy4Uo=w400-h336" width="400" /></a></div><div class="separator" style="clear: both; text-align: center;"><br /></div><div class="separator" style="clear: both; text-align: center;"><br /></div><div class="separator" style="clear: both; text-align: center;"><br /></div><div class="separator" style="clear: both; text-align: center;"><span style="font-family: Charter, Georgia, Times, serif; text-align: left;"><i><span style="font-size: large;">May your troubles be less and your blessings be more, </span></i></span></div><div class="separator" style="clear: both; text-align: center;"><span style="font-family: Charter, Georgia, Times, serif; text-align: left;"><i><span style="font-size: large;">and nothing but happiness come through your door</span></i></span></div><div class="separator" style="clear: both; text-align: center;"><br /></div><br /><br /></div><div class="separator" style="clear: both; text-align: center;"><b>The Associates at Crystal Equity Research</b></div><div class="separator" style="clear: both; text-align: center;"><b><br /></b></div><div class="separator" style="clear: both; text-align: center;"><b><br /></b></div><div class="separator" style="clear: both; text-align: center;"><b><br /></b></div><div class="separator" style="clear: both; text-align: center;"><b><br /></b></div><br /><br /><p></p>Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.com0tag:blogger.com,1999:blog-23359270.post-82612635017325749472022-12-23T09:08:00.001-05:002022-12-24T09:14:25.538-05:00Greetings of the Season!<p style="text-align: center;"> </p><p style="text-align: center;"><br /></p><p style="text-align: center;"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEgzP3mwIYOYVM3blXQ1Z9dQcblOlDbyZPIBXp4yLJLSISyuNHwYxoQgRqXjthI05C0rDL_fweuygHOa4HMtvch045tlskAuWNIhFoHPjQmYrX7gQzVFDvthyRBt-TtvTW0cfHsdbH6o7NrLxzblitpLhVGJLUrl5yHjOesYv05oVT8rsEPVr4o" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="411" data-original-width="500" height="330" src="https://blogger.googleusercontent.com/img/a/AVvXsEgzP3mwIYOYVM3blXQ1Z9dQcblOlDbyZPIBXp4yLJLSISyuNHwYxoQgRqXjthI05C0rDL_fweuygHOa4HMtvch045tlskAuWNIhFoHPjQmYrX7gQzVFDvthyRBt-TtvTW0cfHsdbH6o7NrLxzblitpLhVGJLUrl5yHjOesYv05oVT8rsEPVr4o=w401-h330" width="401" /></a></div><br /><br /><p></p><p style="text-align: center;"><br /></p><p style="text-align: center;"><b><i>May the light of the holiday season shine in your life all the year through!</i></b></p><p style="text-align: center;"><b><i><br /></i></b></p><p style="text-align: center;"><b><i>The Associates at Crystal Equity Research</i></b></p>Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.com2tag:blogger.com,1999:blog-23359270.post-37184844637023526772022-10-07T14:03:00.013-04:002022-11-11T14:11:46.472-05:00Plugged In!<p><span style="font-family: Roboto; font-size: 13pt;">Many people
might identify the 2009 Tesla Roadster sports car as the first electric car. </span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">Not even close.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">To be absolutely correct, the first electric
car hit the road in 1830.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">Yes, nearly
200 years ago, a Scotsman put a motorized carriage on the road.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">Its batteries were not chargeable so no one
complained that it could not be a successful mode of transport.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">In the modern age </span><b style="font-family: Roboto; font-size: 13pt;"><span style="color: #c45911; mso-themecolor: accent2; mso-themeshade: 191;"><a href="https://www.gm.com/"><span style="color: #c45911; mso-themecolor: accent2; mso-themeshade: 191;">General Motors
(GM: NYSE)</span></a></span></b><span style="font-family: Roboto; font-size: 13pt;"> was
first to the market in 1996 with its EV1.</span><span style="font-family: Roboto; font-size: 13pt;"> </span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEixCZLGGIc1CJCLBE6As7SvUtw1Jsh6YXDeMy7KbYuxODbn8ZsqANPHm1n84INTh0e1WyrInxrzxaW0g-R-0fQqigio_IWalyMsWIH-jl4wOwTinnP_70j_-wxlSGik2-9OMMfgVR-9h_mLWR5Ty4ZZbUP7duxJ8vtw8-5HM6XFQ2K9Ipvy0BU" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="" data-original-height="300" data-original-width="480" height="200" src="https://blogger.googleusercontent.com/img/a/AVvXsEixCZLGGIc1CJCLBE6As7SvUtw1Jsh6YXDeMy7KbYuxODbn8ZsqANPHm1n84INTh0e1WyrInxrzxaW0g-R-0fQqigio_IWalyMsWIH-jl4wOwTinnP_70j_-wxlSGik2-9OMMfgVR-9h_mLWR5Ty4ZZbUP7duxJ8vtw8-5HM6XFQ2K9Ipvy0BU" width="320" /></a></div><span style="font-size: 13pt;">GM made its EV1
available only through a lease program and eventually killed off the EV1 model
by recalling every car at the end of its lease.</span><span style="font-size: 13pt;">
</span><span style="font-size: 13pt;">Although many in the 1990s used the lack of charging capacity as an argument
against electric cars, it was never an issue for the EV1.</span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;">In the early days of the modern electric
cars, combustion-oriented leadership at GM simply lacked enthusiasm for EVs and
engaged in behind-the-scene politics with </span><b style="font-size: 13pt;"><span style="color: #c45911; mso-themecolor: accent2; mso-themeshade: 191;"><a href="https://caletc.com/"><span style="color: #c45911; mso-themecolor: accent2; mso-themeshade: 191;">California’s
Electric Transportation Coalition (CARB)</span></a></span></b><span style="font-size: 13pt;">.</span><span style="font-size: 13pt;"> </span><p></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><span></span></span></p><a name='more'></a>Some savvy EV1
lessees hid their cars and kept them as collector cars.<span style="mso-spacerun: yes;"> </span>Beginning with these early electric car
enthusiasts, consumers have had their way. <span style="mso-spacerun: yes;"> </span>Today there are over thirty electric car vehicles
available for commercial sale.<span style="mso-spacerun: yes;"> </span>Many car
makers have plans to make EVs the core of their product line.<span style="mso-spacerun: yes;"> </span>For example, American Honda Motor Company has
a goal of 100% zero-emissions electrified vehicles by 2040.<span style="mso-spacerun: yes;"> </span>Interestingly, a partnership with General Motors
will make it possible for American Honda to introduce a low-cost EV.<span style="mso-spacerun: yes;"> </span>Ford Motor Company has a more ambitious goal
of 2030 to electrify its entire vehicle portfolio. <o:p></o:p><p></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Charging is no
longer a significant issue.<span style="mso-spacerun: yes;"> </span>There are an
estimated 140,000 public electric vehicle chargers at 53,000 charging stations across
the U.S.<span style="mso-spacerun: yes;"> </span>This compares to 145,000 gas
fueling stations around the country. <span style="mso-spacerun: yes;"> </span>Clearly,
there is much work to be done to develop electric charging capacity.<span style="mso-spacerun: yes;"> </span>Still U.S. electric car owners can charge up
at home and get topped off on a cross continental trip.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Companies with
charging solutions and services present interesting investment opportunities
for patient investors.<span style="mso-spacerun: yes;"> </span><i>In the next post
we look at the publicly traded stocks of four companies with major roles in the
electric car charging scene.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span></i><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><i style="mso-bidi-font-style: normal;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Neither the author of the Small Cap Strategist web
log, Crystal Equity Research nor its affiliates have a beneficial interest in
the companies mentioned herein. <o:p></o:p></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.com0tag:blogger.com,1999:blog-23359270.post-68818439797804054522022-09-30T21:08:00.008-04:002022-10-26T21:26:42.549-04:00Hydrogen Innovation<p><span style="font-family: Roboto; font-size: 13pt;">At the most
basic level all fuel cells are energy transformers, converting chemical energy
in a fuel to thermal energy without combustion.</span><span style="font-family: Roboto; font-size: 13pt;">
</span><span style="font-family: Roboto; font-size: 13pt;">Indeed, a hydrogen fuel cell could be two to three times more efficient
that an internal combustion engine running on gasoline. </span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">The efficiency advantage over greenhouse gas
producing engines is why hydrogen fuel cells are getting so much attention. </span><span style="font-family: Roboto; font-size: 13pt;"> </span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Fuel cell
function is exclusively chemical<span style="mso-spacerun: yes;"> </span>-<span style="mso-spacerun: yes;"> </span>no mechanical parts, no noise from busy motors
or moving parts and mostly importantly, no flame. <span style="mso-spacerun: yes;"> </span>Hydrogen fuel cells feature the typical
battery components<span style="mso-spacerun: yes;"> </span>-<span style="mso-spacerun: yes;"> </span>an anode and a cathode, separated by an electrolyte
for a conductor. <span style="mso-spacerun: yes;"> </span>Fuel is delivered to the
anode side and an oxidant, usually air, is delivered to the cathode. <span style="mso-spacerun: yes;"> </span>Electrons and protons from the atoms of fuel
are stripped off in the anode.<span style="mso-spacerun: yes;"> </span>Then the
electrolyte conducts the negatively charged electrons through a circuit,
generating electricity.<span style="mso-spacerun: yes;"> </span>After a round
through the circuit, the electrons recombine with the protons and oxygen from
the air in the cathode to make water molecules.<span style="mso-spacerun: yes;">
</span>Water is the only by-product of the hydrogen fuel cell.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p><span></span></o:p></span></p><a name='more'></a> <div class="separator" style="clear: both; text-align: center;"><img alt="" data-original-height="287" data-original-width="379" height="240" src="https://blogger.googleusercontent.com/img/a/AVvXsEhv3AsQjxu54X2CRnCq-fGoGGrJP1Um57KDkPzysX6R07KDwBjnOUkDDSQlVHLYlkrJFzbp2_rvKpGeTwZIohUvjhE2dAa2yPEeDwdztaNq-wbDFuRvLa3xrZMOXJbRWz-WwFBcXaDoYeR15zWhkvAjZpllSh78SYkZZCiV2VDJ97-tH06aZQ4" width="317" /></div><p></p>
<p class="MsoNormal" style="margin-bottom: 10pt; text-align: center;"><i><span style="font-family: Roboto; font-size: 8.0pt; line-height: 125%;">Source:<span style="mso-spacerun: yes;">
</span>National Energy Technology Laboratory<o:p></o:p></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">The detail is
offered to demonstrate how much room there might be for innovation in the
hydrogen fuel cell.<span style="mso-spacerun: yes;"> </span>Indeed, there are dozens
of fuel cell designs.<span style="mso-spacerun: yes;"> </span>Several of the most
innovative players in the hydrogen fuel cell game have chosen a design that
uses a solid material rather than a liquid for the electrolyte component<span style="mso-spacerun: yes;"> </span>-<span style="mso-spacerun: yes;"> </span>the
solid oxide fuel cell.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Nicknamed SOFCs,
the design delivers about 60% efficiency<span style="mso-spacerun: yes;">
</span>-<span style="mso-spacerun: yes;"> </span>i.e. that much energy stored in
the fuel is converted to electrical energy.<span style="mso-spacerun: yes;">
</span><span style="mso-spacerun: yes;"> </span>SOFCs operate at high temperatures
and thus do not require expensive platinum catalyst material needed in alternative
designs.<span style="mso-spacerun: yes;"> </span>The excess heat can be used in
a cogeneration scheme, providing users with another strong economic boost.<span style="mso-spacerun: yes;"> </span>Designers also have options for the form
factor, including tubular geometries or wave-like structures as well as the
conventional planar or ‘sandwich design’. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Investors can
get a bite of the SOFC promise with a stake in <b><span style="color: #c45911;"><a href="https://www.bloomenergy.com/"><span style="color: #c45911;">Bloom Energy
(BE:<span style="mso-spacerun: yes;"> </span>NYSE)</span></a></span></b>.<span style="mso-spacerun: yes;"> </span>Bloom’s Energy Server is a power generation
platform that demonstrates one of the other advantages of the SOFC design<span style="mso-spacerun: yes;"> </span>-<span style="mso-spacerun: yes;"> </span>flexibility
to work with a variety of fuel types, including natural gas or biogas as well
as hydrogen.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Bloom’s most
recently announced customer is Taylor Farms in California.<span style="mso-spacerun: yes;"> </span>The produce grower is vulnerable to brown-outs
and black-outs that have become typical of California’s power industry.<span style="mso-spacerun: yes;"> </span>Bloom is supplying 6.0 megawatts of fuel cells
for a private microgrid for its San Juan Bautista facility that will allow
Taylor to disconnect entirely from the utility grid.<span style="mso-spacerun: yes;"> </span>The system will also include 2.0 megawatts of
solar power and a 2.0 megawatt battery array.<span style="mso-spacerun: yes;">
</span>In addition to greater reliability, Taylor Farms will get to claim a
low-carbon production process for its salad fixings and other produce.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Bloom is
certainly not on a mission against electric utilities.<span style="mso-spacerun: yes;"> </span>The company recently partnered with <b><span style="color: #c45911;"><a href="https://my.xcelenergy.com/s/energy-portfolio"><span style="color: #c45911;">Xcel Energy (XEL:<span style="mso-spacerun: yes;">
</span>Nasdaq)</span></a></span></b> to install a hydrogen electrolyzer at Xcel’s
Prairie Island nuclear power plant.<span style="mso-spacerun: yes;"> </span>The
heat and steam produced at the Prairie Island facility will feed the
electrolyzer to produce zero-carbon hydrogen. <span style="mso-spacerun: yes;"> </span>A 240-kilowatt demonstration is planned with
construction scheduled for late 2023 and commissioning in early 2024. <span style="mso-spacerun: yes;"> </span>Xcel chose Bloom’s SOFC design over competing
PEM (polymer electrolyte membrane and alkaline designs.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">In the twelve
months ending June 2022, Bloom recorded $994 million in total sales.<span style="mso-spacerun: yes;"> </span>The company has yet to achieve profitability
as direct costs and operating expenses still loom large against revenue. <span style="mso-spacerun: yes;"> </span>The company used $123.9 million in cash resources
in the same twelve-month period.<span style="mso-spacerun: yes;"> </span>No one
on the Bloom team is likely worried about the cash drain, given a plump bank
balance of $396 million at the end of June 2022.<span style="mso-spacerun: yes;"> </span>A strong cash balance is also needed given Bloom’s
leveraged balance sheet.<span style="mso-spacerun: yes;"> </span>At the end of
June 2022, the company had $1.1 billion in long-term debt.<span style="mso-spacerun: yes;"> </span>Leverage leaves the company’s balance sheet
with net negative tangible book value. <span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">With a balance
sheet revealing a bit of risk, it is not surprising that the stock is somewhat
volatile.<span style="mso-spacerun: yes;"> </span>The company’s stock has a beta
measure of 3.00.<span style="mso-spacerun: yes;"> </span>The stock is also a bit
pricey, trading at 3.0 times sales.<span style="mso-spacerun: yes;"> </span>Of
course, the price to earnings ratio is negative and a shareholder deficit yields
no valuation measure.<span style="mso-spacerun: yes;"> </span>Any one
considering BE should have a long-term investment horizon and a tolerance for
price volatility.<span style="mso-spacerun: yes;"> </span>The price may be worth
it to get a stake in a company that has established a foothold in the hydrogen
power market. <span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><i style="mso-bidi-font-style: normal;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Neither the author of the Small Cap Strategist web log,
Crystal Equity Research nor its affiliates have a beneficial interest in the
companies mentioned herein. <o:p></o:p></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.com0tag:blogger.com,1999:blog-23359270.post-74843364063839766292022-09-23T15:16:00.001-04:002022-10-10T15:27:01.228-04:00Westport: Hydrogen Champion<p><span style="font-family: Roboto; font-size: 13pt;">The most recent post on
<a href="http://crystalequityresearch.blogspot.com/2022/09/hydrogen-as-renewable-fuel.html" target="_blank"><span style="color: #38761d;"><b>September 16</b></span></a></span><sup style="font-family: Roboto;"><a href="http://crystalequityresearch.blogspot.com/2022/09/hydrogen-as-renewable-fuel.html" target="_blank"><span style="color: #38761d;"><b>th</b></span></a></sup><span style="font-family: Roboto; font-size: 13pt;"><a href="http://crystalequityresearch.blogspot.com/2022/09/hydrogen-as-renewable-fuel.html" target="_blank"><span style="color: #38761d;"><b>, “Hydrogen as Renewable Fuel”</b></span></a>, focused on the prediction
of annual growth in excess of 10% through the rest of the decade for the hydrogen
generation market.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">Early on there were
only a few heroes championing hydrogen as a viable energy source to replace
fossil fuels.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">One company that has been among
‘believers’ is </span><b style="font-family: Roboto; font-size: 13pt;"><span style="color: #538135;"><a href="https://wfsinc.com/"><span style="color: #538135;">Westport Fuel Systems (WPRT: Nasdaq)</span></a></span></b><span style="font-family: Roboto; font-size: 13pt;">.</span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">In 2008, when
Westport first came on the scene in the U.S. as a public company, leadership detailed
the company’s low-emission engine and fuel injection systems.<span style="mso-spacerun: yes;"> </span>Westport entered the market with heavy-duty
engines using compressed natural gas.<span style="mso-spacerun: yes;"> </span>‘Natgas’
is certainly an improvement over diesel, which leaves the air filled with pollutant
gases and particulates.<span style="mso-spacerun: yes;"> </span>Unfortunately,
natgas is still a fossil fuel and emits plenty of greenhouse gas emissions. <span style="mso-spacerun: yes;"> </span>Westport leadership made it clear they were
ready to direct their gas-fueled engine technologies toward alternative gaseous
fuels such as renewable diesel or hydrogen.<span></span></span></p><a name='more'></a><o:p></o:p><p></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Westport has a
strong technology base some of which is patent protected.<span style="mso-spacerun: yes;"> </span>Their proprietary fuel pump technology is
particularly distinguishing.<span style="mso-spacerun: yes;"> </span>However,
what may be more interesting about Westport is the company’s strong
relationships with heavy-duty truck manufacturers and owners. <span style="mso-spacerun: yes;"> </span>Even in Westport’s early days as a public
company, leadership had solidified relationships with truck engine manufacturers
Cummins and Weichai Power Company.<span style="mso-spacerun: yes;"> </span>Fast
forward to the current year, Westport reported a joint venture with Cummins,
Inc. that generated a good share of the company’s 2021 revenue.<span style="mso-spacerun: yes;"> </span>Sales in 2021 totaled $312.4 million, on
which Westport earned a 15% gross profit margin.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEju3USVXR3z9Fv34Hsv8vHMIqlQjqC9IBJfwpyfSMN2eGDpoeXjFPZd3Qq6DIlnTf4YRpDeBvA6LRd9WqiCw7_5sv7NOmKD59YuE7kHwEvAoTbmgP20kMz9kGiZi_HozeTC1pktFT21bkKYMrkeYuw-bNPYHKAT983uQz0ods_Ybj4hDw3umMg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img alt="" data-original-height="278" data-original-width="500" height="178" src="https://blogger.googleusercontent.com/img/a/AVvXsEju3USVXR3z9Fv34Hsv8vHMIqlQjqC9IBJfwpyfSMN2eGDpoeXjFPZd3Qq6DIlnTf4YRpDeBvA6LRd9WqiCw7_5sv7NOmKD59YuE7kHwEvAoTbmgP20kMz9kGiZi_HozeTC1pktFT21bkKYMrkeYuw-bNPYHKAT983uQz0ods_Ybj4hDw3umMg" width="320" /></a></div><span style="font-size: 13pt;">As originally
planned Cummins has subsequently bought out Westport’s interest in the joint
venture and intellectual property for $42.2 million.</span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;">Cooperation between the two former partners
is not likely at an end. </span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;">Cummins has agreed to test Westport’s hydrogen
high pressure injection system or HPDI system for use in Cummin’s hydrogen applications.
</span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;">Thus, Westport leadership appears to
have not preserved but expanded its ability to work directly with truck engine
market participants, tapping into their direct knowledge of owner priorities
and truck performance.</span><p></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Westport is relying
heavily on its HPDI technology.<span style="mso-spacerun: yes;"> </span>In 2021,
the company raised $121 million in fresh capital through the sale of common
stock to supports its commercialization effort.<span style="mso-spacerun: yes;">
</span>The funds will not be used on marketing or sales activities alone.<span style="mso-spacerun: yes;"> </span>Leadership is also in the hunt for
complementary or supportive technologies that could be acquired at a bargain. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Leadership
already has one successful acquisition under its collective belt.<span style="mso-spacerun: yes;"> </span>In May 2021, Westport acquired Stako sp. z o.o.,
a manufacturer of liquid petroleum gas fuel storage devices.<span style="mso-spacerun: yes;"> </span>Based on Poland, Stako has over 1,000 models
of liquified petroleum gas or LPG storage tanks, which are supplied to leading
car and truck manufacturers.<span style="mso-spacerun: yes;"> </span>Stako is
considered one of the top position in the European liquified petroleum gas
market.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Of course, LPG
is still a fossil fuel and does emit greenhouse gases.<span style="mso-spacerun: yes;"> </span>However, the technology and knowhow that
Stako has built up could be highly valuable to Westport when attempting a broader
conversion of its truck fleet customers from natural gas to hydrogen.<span style="mso-spacerun: yes;"> </span>Hydrogen can also be stored as a liquid as
well as a compressed gas, giving hydrogen fuel a more marketable profile for
some customers.<span style="mso-spacerun: yes;"> </span>Indeed, hydrogen is already
transported long distance in the liquid form in super-insulated, cryogenic
tanker trucks.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Westport has a
long history of innovation, continuously striving for more efficient, more
environmentally-friendly fuels for its customers.<span style="mso-spacerun: yes;"> </span>The company has suggested improvements to its
HPDI fuel system will be game-changing.<span style="mso-spacerun: yes;">
</span>Called <i>H<sub>2</sub> HPDI</i>, it is designed to convert diesel-powered
engines to hydrogen.<span style="mso-spacerun: yes;"> </span>The engine need not
be switched out by owners and engine manufacturing and repair infrastructure
can still be used. <span style="mso-spacerun: yes;"> </span>Importantly, carbon
dioxide emissions are near zero and that its trouble engine owners get 20% more
power than diesel. <span style="mso-spacerun: yes;"> </span><i>Westport’s new </i>H<sub>2</sub>
HPDI<i> seems like the solution the commercial trucking industry needs to save
on fuel costs while burnishing a ‘green’ reputation.<span style="mso-spacerun: yes;"> </span></i><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Westport’s stock
is trading below ‘a buck’ and that might put off some investors. <span style="mso-spacerun: yes;"> </span>The price implies a multiple of 0.51 times
each sales dollar over the last year and 0.70 times Westport’s book value at
the end of June 2022.<span style="mso-spacerun: yes;"> </span>For contrarian
investors, those multiples are a siren call to grab a position.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><i><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">So, what does an
investor get when taking a long position in WPRT?</span></i><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"> <span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">The company held
$98.2 million in cash on its balance sheet at the end of June 2022.<span style="mso-spacerun: yes;"> </span>Working capital was an ample $168.4
million.<span style="mso-spacerun: yes;"> </span>Total debt was $80.9
million.<span style="mso-spacerun: yes;"> </span>A strong balance sheet could be
enough of a bargain to jump in with both feet.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">However, there
is another perspective that should be acknowledged.<span style="mso-spacerun: yes;"> </span>Using financial performance in the trailing
twelve months, the company’s return on invested capital (ROIC), is
negative.<span style="mso-spacerun: yes;"> </span>Ouch!<span style="mso-spacerun: yes;"> </span>To make matters worse its cost of capital
(WACC) has increased to the low double digits.<span style="mso-spacerun: yes;">
</span>Ideally, ROIC is greater than WACC, demonstrating that a company is
wringing more value from its capital than it costs to get that capital in the
door.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">In Westport’s
defense, the company has not really had time to fully realize the value from
its hydrogen technology investments.<span style="mso-spacerun: yes;"> </span>True
enough the company has been around for some years, but it is not operating in a
mature sector.<span style="mso-spacerun: yes;"> </span>Indeed, one could argue
that the hydrogen fuel for the transportation market is only just starting out.
<span style="mso-spacerun: yes;"> </span>Thus, it might be too early to hold
Westport up to the ROIC to WACC comparison.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">For an early-stage
industry, a strong balance sheet may be all that Westport needs to deliver
returns for shareholders.<o:p></o:p></span></p><p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><br /></span></p><p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"></span></p><p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><i style="mso-bidi-font-style: normal;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Neither the author of the Small Cap Strategist web log,
Crystal Equity Research nor its affiliates have a beneficial interest in the
companies mentioned herein. <o:p></o:p></span></i></p><br /><p></p>Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.com0tag:blogger.com,1999:blog-23359270.post-49611012604020933252022-09-16T09:47:00.005-04:002022-10-07T09:53:46.432-04:00Hydrogen As Renewable Fuel<p><span style="font-family: Roboto; font-size: 13pt;">The hydrogen
generation market is projected by the industry research firm MarketandMarkets
to reach a value of $264 billion by the year 2027. </span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">The forecast implies a compound annual growth
rate of 10.5% from the current year valued at $160 billion.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">Two rather incongruous growth drivers are at
play:</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">fuel cell powered electric
vehicles on the ground and rockets aimed at space.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">Hydrogen has particular appeal for applications
that are resistant to decarbonization because electrification is technically
difficult.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">Examples are vehicles used in
heavy industry, shipping and aviation.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">However,
there is new-found interest in hydrogen among manufacturers of consumer
vehicles. </span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">Electric vehicle owners are particularly
motivated to drive an environmentally friendly car. </span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;"> </span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">This is somewhat
surprising given that most of the current hydrogen supply is still produced by reforming
fossil fuel.<span style="mso-spacerun: yes;"> </span>In other words, hydrogen is
not very ‘green’.<span style="mso-spacerun: yes;"> </span>It is possible to
produce hydrogen using electrolysis, a process that uses electricity to split
water with hydrogen and oxygen.<span style="mso-spacerun: yes;"> </span>Since
the process gives off no carbon, the only environmental concern with hydrogen
produced by electrolysis is the source of electricity.<span style="mso-spacerun: yes;"> <span></span></span></span></p><a name='more'></a> <o:p></o:p><p></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"></p><div class="separator" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEiWkvfSl9kdL865Hu4joTx9xK7N4xo7uQoYuQez5L6qo6EuYjhoP_5yC91XwlfMP_DhgvjGD35Q_3xaoo7UH-JZ1fXugyPmyYHpgLkjmlPA4U8yY1mtgz-1clvhsjCOXaCjIvZA3ISwOOSIVw62ROZ2or2lhbTHyl2YJgEkSzZspWaX9_bI5XA" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="3105" data-original-width="3103" height="240" src="https://blogger.googleusercontent.com/img/a/AVvXsEiWkvfSl9kdL865Hu4joTx9xK7N4xo7uQoYuQez5L6qo6EuYjhoP_5yC91XwlfMP_DhgvjGD35Q_3xaoo7UH-JZ1fXugyPmyYHpgLkjmlPA4U8yY1mtgz-1clvhsjCOXaCjIvZA3ISwOOSIVw62ROZ2or2lhbTHyl2YJgEkSzZspWaX9_bI5XA" width="240" /></a></div><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><span style="font-size: 13pt;">Electrolysis demonstrates
hydrogen role as an energy carrier.</span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;">Zapping
water with a jolt of electricity simply transports energy created by another element</span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;">-</span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;">H2O
into H and O.</span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;">The chemical energy in
hydrogen is the conversion of electrical energy from the original source of the
chemical energy of hydrocarbons.</span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;">Even
more energy is lost in fuel cells. </span><span style="font-size: 13pt;"> </span></span><p></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Unfortunately, about
30% of the energy in water is lost in the electrolysis process, nearly double
that lost in producing hydrogen from fossil fuels.<span style="mso-spacerun: yes;"> </span>That means hydrogen produced by electrolysis
costs about $3.00 to $8.00 per kilogram compared to $0.50 to $1.70 per kilogram
for conventional fossil fuel-based hydrogen.<span style="mso-spacerun: yes;">
</span>Such costs comparison may stand in the way of realizing the MarketandMarkets
forecast.<span style="mso-spacerun: yes;"> </span>New technologies are needed to
improve the hydrogen production process if the world is serious about achieving
net zero emissions goals by 2050.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><i><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">This post begins
a series on recent developments among hydrogen fuel producers and technology
developers.<o:p></o:p></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><i style="mso-bidi-font-style: normal;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Neither the author of the Small Cap Strategist web
log, Crystal Equity Research nor its affiliates have a beneficial interest in
the companies mentioned herein. <o:p></o:p></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.com0tag:blogger.com,1999:blog-23359270.post-36961984809997601472022-09-09T09:47:00.001-04:002022-09-12T09:51:36.305-04:00Xcel Brands: Financial Report Confirms Growth Strategy<p><span style="font-family: Roboto; font-size: 13pt;">Shareholders of
consumer brand leader </span><b style="font-family: Roboto; font-size: 13pt;"><span style="color: #c45911;"><a href="https://xcelbrands.co/"><span style="color: #c45911;">Xcel Brands
(XCEL: Nasdaq)</span></a></span></b><span style="font-family: Roboto; font-size: 13pt;">
were treated to an ‘as expected’ report for the quarter ending June 2022,
following the previously disclosed sale of a majority share in one the
Company’s principal consumer brands.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">The
deal to sell a 70% interest in the </span><i style="font-family: Roboto; font-size: 13pt;">Mizrahi</i><span style="font-family: Roboto; font-size: 13pt;"> brand closed at the end of
May 2022, and could be observed first in the company’s balance sheet.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">A portion of the $45.4 million in net cash
proceeds was used to paydown all debt, leaving the balance sheet with excess
cash in the bank and a debt-to-equity ratio of 0.00.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">The company also reported a $20.6 million
gain on the sale of the </span><i style="font-family: Roboto; font-size: 13pt;">Mizrahi</i><span style="font-family: Roboto; font-size: 13pt;"> asset, demonstrating the success the Xcel
team achieved with the asset.</span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Financial
strength should give the Xcel team the fire-power to move opportunistically for
growth.<span style="mso-spacerun: yes;"> </span>During the earnings conference
call management cited projects to boost organic sales, including changes to its
supply chain to exploit duty-free importation rules and new distribution points
for existing brands.<span style="mso-spacerun: yes;"> </span>The Xcel team is
hungry and ready to acquire another brand to manage and grow, much like <i>Mizrahi</i>
home run.<span></span></span></p><a name='more'></a><o:p></o:p><p></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;">Xcel’s brand portfolio could withstand the unfavorable economic
conditions better than most apparel companies, given its lead in using the
media to reach consumers.<span style="mso-spacerun: yes;"> </span>Some apparel
names are only just now beginning to use live media events as they grapple with
store closings, inventory write-downs and personnel lay-offs.<span style="mso-spacerun: yes;"> </span>For example, Japan’s casual and professional clothing
brand Uniqlo is just now streaming its first live fashion event. We believe </span><b style="mso-bidi-font-weight: normal;"><span style="color: #c45911; font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><a href="https://www.uniqlo.com/us/en/"><span style="color: #c45911;">Uniqlo</span></a></span></b><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;"> is just one of many retailers that is
turning to media to save their market share.<span style="mso-spacerun: yes;">
</span>By contrast, Xcel is in a significantly better position with a
well-developed body of knowledge in how to use media to convert prospects to
buyers.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;"></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEiDCm1jXpmdM1IkjHJz1Zz7-phYT5uXVARFYI444wleyOZCgLwYH2V4-koouVmeXDECgVxZQJ4KPlPsFo-MmHbh5jQh9lH0tAqun83LXrwMvD_5hmT7iVdH6Fe-6ZMWW_xrK2RQFuQJuPa7PdJVjV2nxm9Z3I77UxKeLkaK3OxxUk5SEvLPgBw" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="" data-original-height="232" data-original-width="232" height="240" src="https://blogger.googleusercontent.com/img/a/AVvXsEiDCm1jXpmdM1IkjHJz1Zz7-phYT5uXVARFYI444wleyOZCgLwYH2V4-koouVmeXDECgVxZQJ4KPlPsFo-MmHbh5jQh9lH0tAqun83LXrwMvD_5hmT7iVdH6Fe-6ZMWW_xrK2RQFuQJuPa7PdJVjV2nxm9Z3I77UxKeLkaK3OxxUk5SEvLPgBw" width="240" /></a></div><span style="font-size: 13pt;">More importantly, Xcel has several product development and distribution
plans in the works that put the company in an advantageous position to deliver
stronger sales and better profit margins. </span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;">During the earnings conference call, management
provided an update.</span><p></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo1; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 13.0pt; line-height: 125%; mso-bidi-font-family: Symbol; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;">A new
warehouse in Mexico will be operational by the end of the 2022.<span style="mso-spacerun: yes;"> </span>The facility is expected to be eligible for reduced
tariffs under the ‘Section 321A’ trade rule that should deliver 17% to 36% in
duty savings that Xcel can use to boost margins or entice wholesalers and
consumers with competitive pricing. We believe this will put Xcel in a
significantly better position relative to rivals. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo1; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 13.0pt; line-height: 125%; mso-bidi-font-family: Symbol; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;">Future quarters
should reflect the benefits of a new third-party logistics (3PL) provider for
the <i>Longaberger</i> brand located in Ohio.<span style="mso-spacerun: yes;">
</span>The move could deliver savings all along the supply chain, from
inventory management to fulfillment and returns.<span style="mso-spacerun: yes;"> </span>The move should help reduce margin pressure
at a time when supply chain costs are rising.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo1; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 13.0pt; line-height: 125%; mso-bidi-font-family: Symbol; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;">New
distribution projects for the <i>Halston</i> and <i>C-Wonder</i> brands in the
United Kingdom are already underway.<span style="mso-spacerun: yes;"> </span>The
opportunities involve a channel composed of 300 independent boutiques in the UK.<span style="mso-spacerun: yes;"> </span>Both projects are expected to begin before
the end of 2022.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo1; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 13.0pt; line-height: 125%; mso-bidi-font-family: Symbol; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;">New
women’s apparel designs under the <i>Mizrahi</i> brand are expected in the
coming months.<span style="mso-spacerun: yes;"> </span>This is pursuant to a new
license arranged by Xcel as part of the deal to sell the Mizrahi majority
position to WHP Group.<span style="mso-spacerun: yes;"> </span>Understandably, Xcel
leadership is a bit tightlipped on these designs and the exact timing may of an
announcement, likely for competitive reasons.<span style="mso-spacerun: yes;"> </span></span><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-bidi-font-weight: bold;"><o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Some investors
might find the stock is deeply undervalued.<span style="mso-spacerun: yes;">
</span>Based on the recent sale of the <i>Mizrahi </i>asset, the retained
portion was valued at $19.8 million at the end of June 2022.<span style="mso-spacerun: yes;"> </span>This compares to a current market
capitalization of $22.4 million and an enterprise value of $11.5 million for
the entire company.<span style="mso-spacerun: yes;"> </span>Based on the deal terms,
the estimated intrinsic value of XELB is $4.80 per share could be considered a
near-term price target.<span style="mso-spacerun: yes;"> </span>This valuation
exercise does not include the value that could accrue from growth investments
the Xcel team has already initiated, meaning there is upside to a $4.80 target.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">XELB appears
priced at a compelling level for long-term investors who can look past the unflattering
top-line comparisons in the recently reported quarter.<span style="mso-spacerun: yes;"> </span>The full picture includes the lubricating
potential of the company’s investment cash kitty and the experience the team
has in finding and growing strong brands.<span style="mso-spacerun: yes;">
</span>The company’s innovative media platform remains a key differentiator for
brand growth by effectively converting viewers to customers. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><i style="mso-bidi-font-style: normal;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Neither the author of the Small Cap Strategist web
log, Crystal Equity Research nor its affiliates have a beneficial interest in
the companies mentioned herein. <o:p></o:p></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><i><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Crystal Equity
Research covers XCEL under the CER Reports research series for issuer sponsored
research with a has a Speculative Buy rating. <o:p></o:p></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.com0tag:blogger.com,1999:blog-23359270.post-25417848574610119692022-09-02T16:26:00.021-04:002022-09-04T16:35:05.878-04:00Holiday Wishes<p style="text-align: center;"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEiWvzn8QuVO1viYgDWsM_fSxEtnuWY5p69NUE3XVXf5CocRud_xuPltoFi-x5wizkgCetgdJbqx_-RUZnmD6py27waYVVN2fgW2Qhx71wnZPfEZhJrQn4odNBffWYfMQxzVkvp6yw1bXzpQc7ABG_KOMEVu9VQEb5UrlaDciy9M3Qa4xonTzEU" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="800" data-original-width="1200" height="297" src="https://blogger.googleusercontent.com/img/a/AVvXsEiWvzn8QuVO1viYgDWsM_fSxEtnuWY5p69NUE3XVXf5CocRud_xuPltoFi-x5wizkgCetgdJbqx_-RUZnmD6py27waYVVN2fgW2Qhx71wnZPfEZhJrQn4odNBffWYfMQxzVkvp6yw1bXzpQc7ABG_KOMEVu9VQEb5UrlaDciy9M3Qa4xonTzEU=w447-h297" width="447" /></a></div><br /> <p></p><p style="text-align: center;"><b>Happy Labor Day!</b></p><p style="text-align: center;"><br /></p><p style="text-align: center;"><i>People work, People play.</i></p><p style="text-align: center;"><i>That's why we have Labor Day.</i></p><p style="text-align: center;"><i>Plumber, bakers, painters, vets.</i></p><p style="text-align: center;"><i>Fishermen with giant nets. </i></p><p style="text-align: center;"><i>Firefights, engineers. </i></p><p style="text-align: center;"><i>Barbers snipping with their shears.</i></p><p style="text-align: center;"><i>Teachers, waiters, nurses, cooks.</i></p><p style="text-align: center;"><i>Authors writing thrilling books.</i></p><p style="text-align: center;"><i>Carpenters and deputies.</i></p><p style="text-align: center;"><i>People who take care of bees.</i></p><p style="text-align: center;"><i>No matter what it is you do.</i></p><p style="text-align: center;"><i>There's one thing that's always true.</i></p><p style="text-align: center;"><i>There's one thing that's always true.</i></p><p style="text-align: center;"><i>every workers needs to rest.</i></p><p style="text-align: center;"><i>I hope your Labor Day is the best.</i></p><p style="text-align: center;"><br /></p><p style="text-align: center;">Lill Pluta</p><p style="text-align: center;"><br /></p><p style="text-align: center;"><br /></p><p style="text-align: center;"><br /></p>Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.com0tag:blogger.com,1999:blog-23359270.post-70527604930910085942022-08-26T17:24:00.014-04:002022-09-03T17:48:37.021-04:00Graphite Prospects<p class="MsoHeader" style="tab-stops: .5in;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%;">Shareholders have plenty to celebrate as Westwater
Resources (WWR:<span style="mso-spacerun: yes;"> </span>NYSE-AMEX) announced a
letter of intent with a manufacturer of consumer batteries to supply
Westwater’s <i>Purified Micronized Graphite</i> (<i>PMG</i>).<span style="mso-spacerun: yes;"> </span>The intention is apparently to begin shipping
PMG to the customer <span style="mso-spacerun: yes;"> </span>in 2023, following
the construction and commissioning of Westwater’s Kellyton, Alabama Graphite
Processing Plant.<span style="mso-spacerun: yes;"> </span>The unnamed battery producer
has committed to additional testing and qualification of <i>PMG</i> samples
produced using the Westwater’s pilot plant capacity.<o:p></o:p></span></p>
<p class="MsoHeader" style="tab-stops: .5in;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%;">The announcement brings to three the
number of customer prospects that have advanced to final steps in Westwater’s
business pipeline, including final qualification testing, indications of
interest in specified volumes and commitments to mutual development
activities.<span style="mso-spacerun: yes;"> </span>Despite the lack of details
regarding the potential customer, the announcement provides strong evidence of
the commercial potential in Westwater’s graphite materials.<span style="mso-spacerun: yes;"> </span>We believe the company has established itself
as a leader in the graphite sector in terms of its business development
efforts.<span></span></span></p><a name='more'></a><span style="font-family: Roboto; font-size: 13pt; line-height: 125%;"><o:p></o:p></span><p></p>
<p class="MsoHeader" style="line-height: 15pt; margin-bottom: 12.0pt; margin-left: 42.0pt; margin-right: -16.8pt; margin-top: 0in; margin: 0in -16.8pt 12pt 42pt; mso-list: l0 level1 lfo1; tab-stops: .5in; text-indent: -0.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 13pt; mso-bidi-font-family: Symbol; mso-bidi-font-weight: bold; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: Roboto; font-size: 13pt; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold;">August 19, 2019<span style="mso-spacerun: yes;"> </span>-<span style="mso-spacerun: yes;"> </span>announcement
that major battery manufacturer requested a bulk sample of one metric ton of <i>ULTRA-PMG</i>
product for further testing; update in June 2020, one metric ton sample shipped
and customer qualification underway, possibly for alkaline battery designs.<o:p></o:p></span></p>
<p class="MsoHeader" style="line-height: 15pt; margin-bottom: 12.0pt; margin-left: 42.0pt; margin-right: -16.8pt; margin-top: 0in; margin: 0in -16.8pt 12pt 42pt; mso-list: l0 level1 lfo1; tab-stops: .5in; text-indent: -0.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 13pt; mso-bidi-font-family: Symbol; mso-bidi-font-weight: bold; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: Roboto; font-size: 13pt; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold;">November 17, 2021<span style="mso-spacerun: yes;"> </span>-<span style="mso-spacerun: yes;">
</span>letter of intent to sell 125 to 250 metric tons of <i>Coated Spherical
Purified Graphite</i> (<i>CSPG</i>) to a developer of lithium-ion batteries
beginning in 2023; with an option on an additional 16,000 metric tons for
delivery in 2025.<o:p></o:p></span></p>
<p class="MsoHeader" style="line-height: 15pt; margin-bottom: 12.0pt; margin-left: 42.0pt; margin-right: -16.8pt; margin-top: 0in; margin: 0in -16.8pt 12pt 42pt; mso-list: l0 level1 lfo1; tab-stops: .5in; text-indent: -0.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 13pt; mso-bidi-font-family: Symbol; mso-bidi-font-weight: bold; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: Roboto; font-size: 13pt; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold;">August 15, 2022<span style="mso-spacerun: yes;"> </span>-<span style="mso-spacerun: yes;">
</span>letter of intent with an unnamed battery manufacturer for unspecified
volumes of <i>PMG </i>to be delivered beginning in 2023, from Westwater’s
commercial-grade graphite processing in Kellyton, AL; negotiations for
definitive agreements expected in coming months. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"></p><p></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold;"></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEjGXXU0fXJaxy8dxv7U_53-vmMCB6uCZdtv3NuQHt8VIIy8VznseRZ7C0B8BoOLrnkGtW2OUZX1nhyUozcz8yd_aGZ8eviZ_7JkiczDLTh1R5BEVcO_Bs_ih5K7Hoa8R6sQM4_xaVSV_24SeOw3bmG5xOx2__TZEJMt4kafEOAJoQS5babG38A" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="" data-original-height="1000" data-original-width="2000" height="160" src="https://blogger.googleusercontent.com/img/a/AVvXsEjGXXU0fXJaxy8dxv7U_53-vmMCB6uCZdtv3NuQHt8VIIy8VznseRZ7C0B8BoOLrnkGtW2OUZX1nhyUozcz8yd_aGZ8eviZ_7JkiczDLTh1R5BEVcO_Bs_ih5K7Hoa8R6sQM4_xaVSV_24SeOw3bmG5xOx2__TZEJMt4kafEOAJoQS5babG38A" width="320" /></a></div><span style="font-size: 13pt;">Westwater management has been reticent to provide details on any of these
potential customers, citing strict non-disclosure agreements.</span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;">Both parties have good reason to keep details
under wraps.</span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;">Customers do not want to
cue competitors with information about future products or the product
composition.</span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;">Nor do manufacturers want
to give up the name of a good supplier who might also do business with those
competitors.</span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;">Westwater certainly has
strong competitive reasons to keep details about possible customers to
themselves, as the revelation of even the slightest detail could trigger the
sales efforts of rivals for the same prospect.</span><p></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%;">The line up of prospective customers could
dissipate quickly if Westwater does not get its Kellyton, Alabama processing
facility constructed on time.<span style="mso-spacerun: yes;"> </span>The
company has made meaningful progress.<span style="mso-spacerun: yes;">
</span>The project is on schedule to be completed in mid-2023 and move to
commissioning first production later in the year.<span style="mso-spacerun: yes;"> </span>During the recent second quarter earnings conference
call, <span style="mso-bidi-font-weight: bold;">management reported completion of
site preparation, including excavation and dirt works for flood protection,
drainage and building foundations.<span style="mso-spacerun: yes;"> </span>The Company
reported the movement of a total of 97,000 cubic yards of topsoil in the effort.<span style="mso-spacerun: yes;"> </span>Installation of utilities such as water,
electricity and sewer have been initiated for the buildings that will be
constructed over the next few months.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-weight: bold;">Looking at the
WWR price, Westwater does not appear to get credit for its accomplishments.<span style="mso-spacerun: yes;"> </span>A group of sixteen selected graphite
exploration and development companies trade at an average 5.69 times book
value.<span style="mso-spacerun: yes;"> </span>This compares to 0.49 for Westwater.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-weight: bold;">Part of the
difficulty could be the company’s finances.<span style="mso-spacerun: yes;">
</span>The Kellyton graphite facility had an original $202 million price tag
with an estimated $170 million to spend on the partially completed
project.<span style="mso-spacerun: yes;"> </span>At the end of June 2022, the company
had $109.0 million on its balance sheet.<span style="mso-spacerun: yes;">
</span>Westwater management does still have access to two equity sales
agreements that could make up the different.<span style="mso-spacerun: yes;">
</span>However, the low stock price probably is giving investors the jitters
over potential dilution.<span style="mso-spacerun: yes;"> </span>Management has
promised they are diligently looking at all financing options. <span style="mso-spacerun: yes;"> </span></span><span style="font-family: Roboto; font-size: 13pt; line-height: 125%;"><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><i style="mso-bidi-font-style: normal;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Neither the author of the Small Cap Strategist web
log, Crystal Equity Research nor its affiliates have a beneficial interest in
the companies mentioned herein. <o:p></o:p></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><i><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Crystal Equity
Research covers WWR under the CER Reports research series for issuer sponsored
research with a has a Speculative Buy rating. <o:p></o:p></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.com0tag:blogger.com,1999:blog-23359270.post-28936442144945269942022-08-19T12:59:00.003-04:002022-09-02T13:10:26.344-04:00Putting Intelligence in Medical Images<p class="MsoHeader"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%;"><a href="https://www.imagingbiometrics.com/" target="_blank"><b><span style="color: #38761d;">Imaging Biometrics</span></b></a>, the principal
investment of <a href="https://iqai.ltd/" target="_blank"><b><span style="color: #38761d;">IA-QI Ltd. (IQAI: London,IQAIF: OTC/QB)</span></b></a>, has recently received a
strong endorsement from a leading pharmaceutical company, Bayer AG. Imaging Biometrics is focused on providing
advanced image enhancement solutions for users of medical imaging technologies
such as magnetic resonance (MRI) and computed tomography (CAT scan). The company’s <i>IB Clinic</i> platform has
been chosen to debut in the launch of Bayer’s entrance into artificial
intelligence-enabled radiology applications. <o:p></o:p></span></p>
<p class="MsoHeader"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%;">Bayer’s Calantic platform features a small
selection of solutions from a few independent companies, which have agreed to
partner with Bayer in what is arguably a bold move in the fast-growing
radiology applications market. </span><i><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold;">IB Clinic</span></i><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold;"> is featured in Calantic’s Neuro Service line as an
oncology application for processing magnetic resonance images (MRI). <i>IB Clinic</i> is one of nine products in the
Calantic offering. Other vendors include
Avidenna and icometrix in the Neuro Services group and Nanox.ai, Riverain Technologies
and Vida Insights in the Thoracic Services line. <span></span></span></p><a name='more'></a> <span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%;"><o:p></o:p></span><p></p>
<p class="MsoHeader"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold;">The platform is Bayer’s effort to quickly infuse its product line with
leading edge technology based on artificial intelligence. During a launch event in late June 2022, by Todor
Khristov, Digital Accelerator Program Lead Radiology, explained that collaborations
with external partners are an integral part of the Bayer innovation
strategy. He stated, “We recognized the
creative and scientific potential outside of Bayer….By joining forces with
external partners and utilizing their respective expertise, we will be much
quicker in providing new digital solutions in radiology than we would be
alone.” </span><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%;"><o:p></o:p></span></p>
<p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgtlHjRW9aRZ6r80Ow8jJeavQFKj51LWEKTEj9UBoedeQPC5M0GC1FYpj9zuBhBer0SE2aAjq_6QTdKr4Y5ZcB_HnOMrAf26SF5iK5uipTaJzszzkDTi-J1UsMNfGPIoMk_csxNsQot94O7QC64dEYVSM6OnjiiuFdPq9M6wNVVObuunOGf5wA/s997/Calantic%20Neuro%20Service%20Line.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="707" data-original-width="997" height="408" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgtlHjRW9aRZ6r80Ow8jJeavQFKj51LWEKTEj9UBoedeQPC5M0GC1FYpj9zuBhBer0SE2aAjq_6QTdKr4Y5ZcB_HnOMrAf26SF5iK5uipTaJzszzkDTi-J1UsMNfGPIoMk_csxNsQot94O7QC64dEYVSM6OnjiiuFdPq9M6wNVVObuunOGf5wA/w576-h408/Calantic%20Neuro%20Service%20Line.png" width="576" /></a></div><br /><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold;"><br /></span><p></p><p class="MsoNormal"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold;">As noted by
Alexandre Salvador, Bayer’s Head of Digital Solutions in a presentation to
potential customers during the Calantic launch, radiology is perfectly poised
to benefit from technological innovation based on artificial intelligence. Radiology exams generate massive amounts of
data, which can be burdensome for medical professionals to review and correctly
analyze. Artificial intelligence is
designed to gobble up data and rapidly use various algorithms to define and
process that data for a medical conclusion. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-family: Arial; mso-bidi-font-weight: bold;">Salvador believes the
Calantic platform will be taken up rapidly because it offers state of the art
technology that can have a material impact on health care outcomes through
faster diagnosis and fewer errors. This in turn will reduce costs and give users
a good return on investment. Bayer’s
hospital and clinic customers are driven by an increasing use of medical
imaging for diagnostic and treatment purposes.
At the same time there is a shortage of adequately trained radiology
professionals. Increasing workload and inadequate
staffing are expected to drive health care institutions with radiology
departments to make investments in efficiency-creating software.</span></p><p class="MsoNormal"><span style="font-family: Roboto; font-size: 13pt;">For Imaging
Biometrics, it is the potential to be introduced to a wide audience that
provides an incentive to cooperate with the Bayer team.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">Bayer is among the top ten pharmaceutical
companies in the world, credited with approximately 3% of world market share of
global drug and therapies.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">Bayer focuses
on immunology, oncology and the nervous system, making it a strong distribution
channel ally for Imaging Biometrics.</span><span style="font-family: Roboto; font-size: 13pt;"> </span></p><p class="MsoNormal"><span style="font-family: Roboto; font-size: 13pt;">Inclusion in this small group speaks well
to the technological strength in </span><i style="font-family: Roboto; font-size: 13pt;">IB Clinic</i><span style="font-family: Roboto; font-size: 13pt;"> and the capacity of Imaging
Biometrics to support customers.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">It is
logical that Bayer would only risk its world class reputation with strong
partners who can help win and retain customers.</span><span style="font-family: Roboto; font-size: 13pt;"> </span></p>
<p class="MsoHeader"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%;">Despite an uptick in new interest in the shares following this recent
announcement, the IQAI stock price has traded downward in sympathy with the
broader U.S. equity market. This is
unfortunate, given that worries about inflation that have weighed on investor
sentiment apply only tangentially to IQ-AI and its channel partners. We believe hospitals and clinics making
capital investments in efficiency-creating products are not likely to alter
decisions based on the prospect of inflation rates. The upcoming report on financial results in
the first half 2022, could be the next catalyst for the stock. Investors can look for that filing in late
August or early September.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%;"> </span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><i><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%;">Neither
the author of the Small Cap Strategist web log, Crystal Equity Research nor its
affiliates have a beneficial interest in the companies mentioned herein. <o:p></o:p></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%;"> </span></p>
<p><span style="font-family: Roboto; font-size: 13pt;"> </span> </p>Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.com0tag:blogger.com,1999:blog-23359270.post-11598626288262719082022-08-12T17:29:00.001-04:002022-09-01T17:34:18.246-04:00Plug Power's Success Train<p><span style="font-family: Roboto; font-size: 13pt; line-height: 125%;">In the second week in August, </span><b><span style="color: #538135; font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-themecolor: accent6; mso-themeshade: 191;"><a href="https://www.plugpower.com/"><span style="color: #538135; mso-themecolor: accent6; mso-themeshade: 191;">Plug Power (PLUG:
Nasdaq)</span></a></span></b><span style="font-family: Roboto; font-size: 13pt; line-height: 125%;"> reported
financial results for the second quarter ending June 2022. Sales totaled $151.3 million primarily from
the sales of fuel cell systems. The company
also brought in fees from services related to its system as well as power
purchase agreements and the sale of renewable fuel. Altogether sales in the quarter grew 21%
year-over-year.</span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;">Unfortunately, the cost of Plug Power’s sales activity was in excess of
sales and operating expenses have increased in the last year.<span style="mso-spacerun: yes;"> </span>Consequently, the company reported a net loss
of $173.3 million or negative $0.30 per share.<span style="mso-spacerun: yes;">
</span>The net loss deepened by 74% year-over-year as efficiency took a nose
dive in the quarter.<span style="mso-spacerun: yes;"> </span>Ouch!<span style="mso-spacerun: yes;"> </span>Indeed, the company had to dip into the bank
account for $195.2 million in cash to support operations in the June quarter.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;">On the surface the quarter report seemed to offer good news on healthy
demand and possible capture of market share.<span style="mso-spacerun: yes;">
</span>Profits appear to be a long way down the road given that the current production
structure is not profitable and spending at the operating level is building.<span style="mso-spacerun: yes;"> <span></span></span></span></p><a name='more'></a> <o:p></o:p><p></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;">Yet investors seem to find the whole story something to celebrate.<span style="mso-spacerun: yes;"> </span>The shares gapped higher on the quarter news
and closed the week near a 52-week high price. <span style="mso-spacerun: yes;"> </span>Indeed, at the time of this article the PLUG
price level is well in overbought territory according to a popular technical
indicator called the Commodity Channel Index (CCI).<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;">Some investors may be looking past near-term annoyances like a mushrooming
cash burn, to the role that hydrogen is expected to play in the world’s future
energy supply.<span style="mso-spacerun: yes;"> </span>There are plenty of
problems with conventional hydrogen that make it unpalatable in a sustainable renewable
energy world.<span style="mso-spacerun: yes;"> </span>Scientists have been
doggedly trying to solve the deficiencies, giving hydrogen new appeal.<span style="mso-spacerun: yes;"> </span>For example, electrolysis is becoming more efficient,
making it cost effective to abandon the current natural gas steam reforming production
method in favor of the low-carbon method of cracking water using electricity
derived from solar power.<span style="mso-spacerun: yes;"> </span>Storage and
transport equipment has also been improved, removing some of the safety
concerns inherent in handling hydrogen.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;">As a consequence of these technological accomplishments, hydrogen has
taken a new position in world energy development.<span style="mso-spacerun: yes;"> </span>At the end of 2020, in its Hydrogen Insights
Report, the </span><b style="mso-bidi-font-weight: normal;"><span style="color: #538135; font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-themecolor: accent6; mso-themeshade: 191;"><a href="https://hydrogencouncil.com/en/"><span style="color: #538135; mso-themecolor: accent6; mso-themeshade: 191;">Hydrogen Council</span></a> </span></b><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;">noted a total of 228 global hydrogen projects
with a value of $345 billion.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;"></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEgCyNLTa8Y2Z4OIJ_4qxUjylLlcAWF5ZAUIYfBmV6EH0F32MO3jU6e20RumdKG-LcN0QVryiwaYoHLNXwqcS1W978K4O4Q1ZmgB9nbvU21ElKUHvzHGeVKOlqmY4oRmr-n-tYeEG8oPsKPsmLsUPLkisbeWNBePrewbyMB_Ed3V-7-sDENZHso" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="" data-original-height="757" data-original-width="1200" height="202" src="https://blogger.googleusercontent.com/img/a/AVvXsEgCyNLTa8Y2Z4OIJ_4qxUjylLlcAWF5ZAUIYfBmV6EH0F32MO3jU6e20RumdKG-LcN0QVryiwaYoHLNXwqcS1W978K4O4Q1ZmgB9nbvU21ElKUHvzHGeVKOlqmY4oRmr-n-tYeEG8oPsKPsmLsUPLkisbeWNBePrewbyMB_Ed3V-7-sDENZHso" width="320" /></a></div><p></p><p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;">Plug Power made a strategic investment in hydrogen, using its knowledge
of polymer electrolyte membrane (PEM) to develop hydrogen electrolyzers. <span style="mso-spacerun: yes;"> </span>Customers of its <i>GenFuel</i> hydrogen solution
include stationary power producers, materials handling, and mobile power
sources. <span style="mso-spacerun: yes;"> </span>Management points to supply
over 50 million hydrogen fills into the company’s fuel cells.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;">Fortune Business Insights valued the global electrolyzer market at $490.4
million in 2022.<span style="mso-spacerun: yes;"> </span>That may not seem very
large.<span style="mso-spacerun: yes;"> </span>The real excitement is in the
estimated compound annual growth rate of 5.8% that is expected to take the
sector to a value of $620 million by 2029. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;">The company is clearly at the forefront of an industry that is just
getting started.<span style="mso-spacerun: yes;"> </span>Investors prepared to invest
for the long-term could be comfortable in buying a stock at peak prices in
order to make certain they are on Plug Power’s success train. <span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><i style="mso-bidi-font-style: normal;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Neither the author of the Small Cap Strategist web
log, Crystal Equity Research nor its affiliates have a beneficial interest in
the companies mentioned herein. <o:p></o:p></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.com0tag:blogger.com,1999:blog-23359270.post-31032778999979168252022-08-05T10:10:00.039-04:002022-08-30T22:22:05.528-04:00Extinction Event: An Investment Imperative<p><span style="font-family: Roboto; font-size: 13pt;">Remember the
dinosaurs?</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">Of course not.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">They went extinct several million years ago.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">Volcanic activity and possibly the impact of
a very large meteor led to loss of plant life needed to sustain the lower end
of the food chain.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">At the time, 80% of
species were lost in what is now called the Cretaceous-Paleogene era. </span><span style="font-family: Roboto; font-size: 13pt;"> </span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">The demise of
the dinosaurs did make way for sharks in the oceans and land mammals, including
humans.<span style="mso-spacerun: yes;"> </span>The disappearance of one group
made way for the other.<span style="mso-spacerun: yes;"> </span>Indeed, the dinosaurs
were able to thrive in the first place because extreme volcanic activity some 50 million
years earlier had led to toxic carbon dioxide and methane levels.<span style="mso-spacerun: yes;"> </span>An extraordinary 96% of species were wiped
out by those gases.<span style="mso-spacerun: yes;"> </span>The remaining few
evolved into new sea life and eventually the dinosaurs. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><i>One has to
wonder then what sort of animal life will take over when humans are no longer
around. Wait, what?<span style="mso-spacerun: yes;"> </span>Human extinction?</i><i> </i> </span></p><p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Yes, humans could easily be replaced in the current
geological period, the Holocene era.<span style="mso-spacerun: yes;"> </span>That
is because the planet is experiencing the sixth mass extinction event since
Earth did it first turn around the Sun.<span style="mso-spacerun: yes;">
</span>As much as half of known species today could be extinct<span style="mso-spacerun: yes;"> </span>-<span style="mso-spacerun: yes;"> </span>no
living member<span style="mso-spacerun: yes;"> </span>-<span style="mso-spacerun: yes;"> </span>by the middle of the current century.<span></span></span></p><a name='more'></a><o:p></o:p><p></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEhYxmzMxLmulO5qg0SlbO-atufCto3AbMH9qFaGeZGtEUDX_6knlOBvammm6QaCen2ZfeOUX2UsjUjKY3HnotRu-SomjZUghjG-nnaJk7AQRD-yzWHIXYXstUV4Ypz3yFwOSBiCvMsnY6uWgfUfszaXRO67_dsyPiCcn06z02S7FUObOCxTDm4" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="512" data-original-width="768" height="349" src="https://blogger.googleusercontent.com/img/a/AVvXsEhYxmzMxLmulO5qg0SlbO-atufCto3AbMH9qFaGeZGtEUDX_6knlOBvammm6QaCen2ZfeOUX2UsjUjKY3HnotRu-SomjZUghjG-nnaJk7AQRD-yzWHIXYXstUV4Ypz3yFwOSBiCvMsnY6uWgfUfszaXRO67_dsyPiCcn06z02S7FUObOCxTDm4=w526-h349" width="526" /></a></div><br /><span style="font-size: 13pt;">The cause?</span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;">Human activity is causing loss of habitat.</span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;">Human carelessness has increased emission of
toxic pollutants that kill animals and bird. </span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;">Combusting fossil fuels by humans is putting
greenhouse gases into the Earth atmosphere, warming the air shell around the globe.</span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;">Pollution and global warming are leading to
warmer and increasingly acidic oceans.</span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;">The
consequences are extreme weather events that reduce or destroy agriculture
crops as well as alter ocean shorelines. </span><span style="font-size: 13pt;"> </span><span style="font-size: 13pt;"> </span><p></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">A number of
species have already been lost, some of them famous such as the Dodo Bird or
the Tasmanian Tiger. <span style="mso-spacerun: yes;"> </span>Others are less
well known, like the the Passenger Pigeon or the Western Black Rhinoceros. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Human activity
has had a profound impact on the two island-continents Australia and Antarctica.
<span style="mso-spacerun: yes;"> </span>Pollution and the introduction of foreign
species such as sheep, horses, rabbits, cats and rats has led to the disappearance
of hundreds of species in Australia.<span style="mso-spacerun: yes;">
</span>Global warming is deeply impacting Antarctica<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Ok, but why does
it matter?<span style="mso-spacerun: yes;"> </span>Australia still has plenty of
kangaroos and platypus around.<span style="mso-spacerun: yes;"> </span>There are
still penguins in Antarctica.<span style="mso-spacerun: yes;"> </span>It is
perhaps wise to look beyond the tourism posters.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Scientists working
across Australia and Antarctica have identified nineteen ecosystems that are
collapsing due to the impact of humans.<span style="mso-spacerun: yes;">
</span>They point to dying coral reefs, drying tropical savanna, shrinking
mangroves in the Gulf of Carpenteria and damaged moss bends in eastern
Antarctica.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Why should
humans care?<span style="mso-spacerun: yes;"> </span>The breakdown of an
ecosystem has a profound impact on the food chain and water resources upon which
humans count for sustenance. <span style="mso-spacerun: yes;"> </span>An ecosystem
is put into peril by the loss of a keystone species<span style="mso-spacerun: yes;"> </span>-<span style="mso-spacerun: yes;"> </span>an
organism that regulates all animal and plant life.<span style="mso-spacerun: yes;"> </span>Take for example, the African Elephant.<span style="mso-spacerun: yes;"> </span>There is much more to them than eye candy for
safaris.<span style="mso-spacerun: yes;"> </span>They shape their habitat with
their elephant ways.<span style="mso-spacerun: yes;"> </span>During the dry
season they use their tusks to dig up dry riverbeds, creating watering holes
that other species can also use.<span style="mso-spacerun: yes;"> </span>Their dung
is full of undigested plant matter that feeds insect life and fertilizes the
savanna.<span style="mso-spacerun: yes;"> </span>They keep brush growth at bay
by breaking down and eating trees, allowing grasses to grow for grazing animals.<span style="mso-spacerun: yes;"> </span>These activities also favorably impact the
watershed at the earliest sources. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Elephants are
struggling against illegal poaching and the loss of habitat due to agriculture
expansion and logging. They are getting more attention than some animals in
danger of imminent extinction.<span style="mso-spacerun: yes;"> </span>For example,
the Amur Leopard is a cat species in particular peril in its home turf in China,
Russia and Korea.<span style="mso-spacerun: yes;"> </span>There are less than six
dozen in the wild.<span style="mso-spacerun: yes;"> </span>The Amur Leopard is
known to be a keystone species within certain habitats by keeping in balance
prey populations such as deer.<span style="mso-spacerun: yes;">
</span>Overgrazing by a large deer population gives rise to erosion that
interrupts the flow of rainwater into watersheds<span style="mso-spacerun: yes;"> </span>-<span style="mso-spacerun: yes;"> </span>the
very watersheds that supply humans with vital water resources. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Breeding
programs for captive Amur Leopards are valiantly attempting to keep the gene pool
above a critical threshold.<span style="mso-spacerun: yes;"> </span>Indeed, adequate
gene levels is vital to maintain diversity and robust resistance to disease. <span style="mso-spacerun: yes;"> </span>Otherwise, a species is likely to be on the
list when scientists tally up the lost animals and bird of the Holocene.<span style="mso-spacerun: yes;"> </span>Humans need to realize they could be on that
list as well.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Seriously, why
all the drama?<span style="mso-spacerun: yes;"> </span>Why is extinction
important for investors?<span style="mso-spacerun: yes;"> </span>A solution is
needed.<span style="mso-spacerun: yes;"> </span>The existence of wild animals is
a key to maintenance of human food and water supplies.<span style="mso-spacerun: yes;"> </span>Even an animal as obscure as a wild cat
halfway around the world.<span style="mso-spacerun: yes;"> </span>One ecosystem
falls, then another and finally enough ecological dominoes are tipped over to
reach one that impacts your food, your water.<span style="mso-spacerun: yes;">
</span>Test how long it will take.<span style="mso-spacerun: yes;"> </span>Where
does your food come from.<span style="mso-spacerun: yes;"> </span>Down the road?<span style="mso-spacerun: yes;"> </span>Other side of your continent? <span style="mso-spacerun: yes;"> </span>Another continent?</span></p><p class="MsoNormal" style="margin-bottom: 10pt;"><i><span style="font-family: Roboto; font-size: 13pt;">There
is no environmental fairy god mother to fix things.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">No bright shiny spaceship to take us to a different
planet.</span></i></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Companies either
to make the problem worse or support solutions.<span style="mso-spacerun: yes;">
</span>As an investor or even a short-term trader providing liquidity, how is your
capital allocated?<span style="mso-spacerun: yes;"> </span>To the perpetrators
of the problem or to the supporters of solutions?<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">The allocation
of capital to an investment, to a trade, makes you either part of the problem
or part of the solution.<span style="mso-spacerun: yes;"> </span>Is your capital
going into the current meme stock?<span style="mso-spacerun: yes;"> </span>Are
they a water polluter?<span style="mso-spacerun: yes;"> </span>An emitter of
greenhouse gases?<span style="mso-spacerun: yes;"> </span>Does the company seeking
resource efficiency or conduct business like there is no tomorrow?<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> <br /></span><o:p></o:p></span></p><p class="MsoNormal" style="margin-bottom: 10pt; text-align: center;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><span style="mso-spacerun: yes;"><br /></span></span></p><p class="MsoNormal" style="margin-bottom: 10pt; text-align: center;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvUfSxNjYsSkmq-kS6gaTnbpLIP-jns6BIiznH9HDiEXFK_tmpGzn3wEGIjQsV_JEbDxipqhf0YZD4KvJG4uzLrM3m43YEZHCe6RimZzPXsEXw3KYzzvgQajUqYZIF7Jj_R4TW3CUPX2616uc79pcNGaCfsmsGHZmdnLd4EL-ySyKjtj90-Dk/s984/Extinction%20Events%20Table.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="587" data-original-width="984" height="318" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvUfSxNjYsSkmq-kS6gaTnbpLIP-jns6BIiznH9HDiEXFK_tmpGzn3wEGIjQsV_JEbDxipqhf0YZD4KvJG4uzLrM3m43YEZHCe6RimZzPXsEXw3KYzzvgQajUqYZIF7Jj_R4TW3CUPX2616uc79pcNGaCfsmsGHZmdnLd4EL-ySyKjtj90-Dk/w533-h318/Extinction%20Events%20Table.jpg" width="533" /></a></div><br /><p></p><p class="MsoNormal" style="margin-bottom: 10pt;"><i><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><br /></span></i></p><p class="MsoNormal" style="margin-bottom: 10pt;"><i><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Neither the author of the Small Cap Strategist web
log, Crystal Equity Research nor its affiliates have a beneficial interest in
the companies mentioned herein. <o:p></o:p></span></i></p><p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"> </span></p><p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">
</span></p><p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"> </span></p>
Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.com0tag:blogger.com,1999:blog-23359270.post-30696011884655596952022-07-29T15:39:00.004-04:002022-08-29T15:42:36.722-04:00Xcel Brands Fills War Chest For Acquisitions<p> <b><span style="color: #2e74b5; font-family: Roboto; font-size: 13pt; line-height: 125%; mso-themecolor: accent5; mso-themeshade: 191;"><a href="https://xcelbrands.co/"><span style="color: #2e74b5; mso-themecolor: accent5; mso-themeshade: 191;">Xcel Brands, Inc. (XELB: Nasdaq)</span></a></span></b><span style="font-family: Roboto; font-size: 13pt; line-height: 125%;"> is a consumer
products company with a twist. The company
has artfully deployed visual media to engage customers with its portfolio of consumer
lifestyle brands, including clothing, footwear, jewelry, furniture, and home
accents. Indeed, the Company seems to
have perfected the use of live streaming and interactive media in an omni-channel
marketing strategy, providing Xcel with a strong advantage in a market well
populated by competitors. Consumers are
treated to excellent products from quality brands on venues that engage and
entertain. The impressive portfolio of
brands includes Isaac Mizrahi, Halston, Lori Goldstein, C Wonder, and Judith
Ripka. The company also offers Longaberger
branded products for the kitchen and dining as well as home furnishings and
decor.</span></p>
<p class="MsoHeader" style="tab-stops: .5in;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%;">In May 2022, the company sold a majority
share in its Isaac Mizrahi brand and used some of the proceeds to pay off all
debt.<span style="mso-spacerun: yes;"> </span>With a debt-free balance sheet and
increased cash resources, the company is in a position to move aggressively in
acquiring new brands or investing in its existing portfolio.<span style="mso-spacerun: yes;"> </span>With more designers than ever seeking brand
partners, availability of investment capital is timely for closing deals.<span style="mso-spacerun: yes;"> </span>Indeed, management hints the potential for
new joint ventures with young designers as well as several projects underway
for fresh interactive television programming.<span></span></span></p><a name='more'></a><span style="mso-spacerun: yes;"><p class="MsoHeader"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%;"></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEiJ8SSi_bxqnbZiVn8-jJVvDKeZJsfd38EEgGPtJ_yveYHTdrj5YY8TS7haz-NcsyjP7fQbmBm90qjrE6Gd5iyRWu9UfT2bVaJ1meWVJpvVNwrZgeCihV8vNAKMjNPYmyjl3NJHYMlo1D-DAdWlg7N_OEAXHrCQfaZIptD6bK-GE0zf2MuAf_s" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="" data-original-height="720" data-original-width="1280" height="180" src="https://blogger.googleusercontent.com/img/a/AVvXsEiJ8SSi_bxqnbZiVn8-jJVvDKeZJsfd38EEgGPtJ_yveYHTdrj5YY8TS7haz-NcsyjP7fQbmBm90qjrE6Gd5iyRWu9UfT2bVaJ1meWVJpvVNwrZgeCihV8vNAKMjNPYmyjl3NJHYMlo1D-DAdWlg7N_OEAXHrCQfaZIptD6bK-GE0zf2MuAf_s" width="320" /></a></div>Importantly, the Mizrahi brand will be an
important part of future growth as the company retained a minority position in
the brand and forged a new license for women’s apparel. Management is confident in top-line expansion
and a return to profitability in the next year. <o:p></o:p><p></p></span><p></p><p class="MsoHeader" style="tab-stops: .5in;"><span style="font-family: Roboto; font-size: 13pt;">We initiated coverage of XELB with a Speculative Buy rating and $4.80
target price for the next six months.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">Based
on the trading multiples for comparable public companies we believe the stock
is deeply undervalued relative to its peers.</span><span style="font-family: Roboto; font-size: 13pt;">
</span><span style="font-family: Roboto; font-size: 13pt;">Our price target corresponds to an estimated intrinsic market value of
the company implied by the recent Mizrahi transaction. Indeed, that deal
suggests the current market capitalization is barely more than the value of the
retained portion of Mizrahi brand asset.</span><span style="font-family: Roboto; font-size: 13pt;">
</span><span style="font-family: Roboto; font-size: 13pt;">From this perspective, at the current share price investors are paying
for just the remaining Mizrahi brand asset and getting the rest of the
portfolio for free.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;"> </span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%;">We believe the company’s stock price could
get a reset as investors come to fully appreciate the benefits of monetizing
the company’s investment in the Isaac Mizrahi brand.<span style="mso-spacerun: yes;"> </span>The proceeds have been used reduce risk by deleveraging
the balance sheet <span style="mso-spacerun: yes;"> </span>-<span style="mso-spacerun: yes;"> </span>with enough cash left over for additional
growth investments.<span style="mso-spacerun: yes;"> </span>The June 2022
quarter report will reveal the company’s stronger financial profile with no
debt and higher cash balance.<span style="mso-spacerun: yes;"> </span>Also,
announcements regarding brand or product initiatives could service as catalysts
for investor sentiment.<b style="mso-bidi-font-weight: normal;"><o:p></o:p></b></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><i style="mso-bidi-font-style: normal;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Neither the author of the Small Cap Strategist web
log, Crystal Equity Research nor its affiliates have a beneficial interest in
the companies mentioned herein. <o:p></o:p></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><i><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Crystal Equity
Research covers XELB under the CER Reports research series for issuer sponsored
research with a has a Speculative Buy rating. <o:p></o:p></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10pt;"><span style="font-family: Roboto; font-size: 13pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.com0tag:blogger.com,1999:blog-23359270.post-84673267167497267722022-07-22T13:11:00.002-04:002022-08-29T13:15:13.707-04:00Green Plains: Self-made Biorefiner, Protein Supplier<p><b><span style="color: #538135; font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><a href="https://gpreinc.com/"><span style="color: #538135;">Green Plains, Inc. (GPRE:
Nasdaq)</span></a></span></b><span style="font-family: Roboto; font-size: 13pt; line-height: 125%;"> is on
the calendar to release financial results for the second quarter ending June
2022, on August 2<sup>nd</sup> before the market open. The report will be held up against a consensus
expectation for $0.15 per share in the quarter.
The company has missed the common view in each of the previous four
quarters, so traders should not hold out for a ‘beat’ in this quarter, unless a
one-time event or accounting treatment helps pad the bottom line.</span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;">Traders may be more interested in hearing more from Green Plains
management about a recently announced partnership with </span><b style="mso-bidi-font-weight: normal;"><span style="color: #538135; font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><a href="https://riverence.com/"><span style="color: #538135;">Riverence Group</span></a></span></b><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;">, <span style="mso-spacerun: yes;"> </span>a
sustainable aquaculture enterprise focused on salmon and trout.<span style="mso-spacerun: yes;"> </span>The two are forming a joint venture to expand
aquafeed production in Idaho where Riverence operates fish farms.<span style="mso-spacerun: yes;"> </span>Green Plains recently a successful production
trial of 60%+ fermented protein product.<span></span></span></p><a name='more'></a><span style="font-family: Roboto; font-size: 13pt;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEgAUKuoIH4MaFxgFo5SFVKuH0EWPAppUqjIHRZCIcWp3HZUyX8lzoSCLoo4KnsegJqIAzvySx0b0pYlsaRJPcDmudlyP1WRmM78aJLBbYRl4D16Sxi6ulY7QvtpEWkIeqWFFJsyEoSa2yCIa-17ZMF-a5DvNvqt_LdLB4sQ1Np8cvsfMTfDlmU" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img alt="" data-original-height="168" data-original-width="300" height="179" src="https://blogger.googleusercontent.com/img/a/AVvXsEgAUKuoIH4MaFxgFo5SFVKuH0EWPAppUqjIHRZCIcWp3HZUyX8lzoSCLoo4KnsegJqIAzvySx0b0pYlsaRJPcDmudlyP1WRmM78aJLBbYRl4D16Sxi6ulY7QvtpEWkIeqWFFJsyEoSa2yCIa-17ZMF-a5DvNvqt_LdLB4sQ1Np8cvsfMTfDlmU" width="320" /></a></div>Fermented fish food is a distance from Green Plains origins as an ethanol
producer.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">Over the years the company has
cast about for by-products of the biorefining process that can be used to
improve production margins.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">Cattle feed
has long-been one of those by-products in the form of distiller grains.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">Since the early days, the company has added
corn oil and high-protein feed products to its ethanol and distiller grains
product portfolio</span><span style="font-family: Roboto; font-size: 13pt;"> </span><p></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;">Aquaculture represents a new venture that could bring out meaningful
profits for Green Plains.<span style="mso-spacerun: yes;"> </span>Riverence is a
privately-held company, but reportedly has approximately $71. 0 million in
annual revenue.<span style="mso-spacerun: yes;"> </span>It is likely profitable,
making it a strong partner.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>For its part, Riverence will be able to claim
a low-carbon feed input on top of getting a highly efficient, high protein
food.<span style="mso-spacerun: yes;"> </span>Two factors that can boost sales
and profit margins. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;">GPRE has shown considerable momentum in recent sessions, gapping higher
twice in the last two weeks.<span style="mso-spacerun: yes;"> </span>Leading into
the earnings announcement the stock is deep in overbought territory, according to
the commodity channel index.<span style="mso-spacerun: yes;"> </span>We also
note that as the week as progressed the stock completed formation of a
particularly bullish signal in a candlestick chart called the Three White Soldiers.<span style="mso-spacerun: yes;"> </span>The signal consists of three sequentially
higher long, white candlesticks that demonstrate the force of demand under the
shares.<span style="mso-spacerun: yes;"> </span>The signal came just as the
stock gapped higher two days in a row.<span style="mso-spacerun: yes;">
</span>Of course, GPRE has not been immune from the vagaries of the U.S. equity
market, trading up and down in sympathy with broader ‘risk-on’ and ‘risk-off’
sentiment.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><i style="mso-bidi-font-style: normal;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Neither the author of the Small Cap Strategist web
log, Crystal Equity Research nor its affiliates have a beneficial interest in
the companies mentioned herein. <o:p></o:p></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.com0tag:blogger.com,1999:blog-23359270.post-47533217062282196892022-07-15T16:11:00.011-04:002022-08-28T16:17:02.048-04:00OPTT Year-end Report: Finding Something to Celebrate<p><span style="font-family: Roboto; font-size: 13pt; line-height: 125%;">Earlier this week </span><b><span style="color: #2e74b5; font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><a href="https://oceanpowertechnologies.com/"><span style="color: #2e74b5;">Ocean Power Technologies (OPTT: NYSE-AMEX)</span></a></span></b><span style="font-family: Roboto; font-size: 13pt; line-height: 125%;"> reported financial results for the fourth
quarter and fiscal year ending April 2022.
Shareholders did not have much to celebrate in terms of revenue
growth. Fourth quarter sales increased
to $756,000 compared to the same period in the previous year and this only
through the company’s consulting work. The
net loss in the quarter was $5.2 million, the same as in the previous
year. The fate of the top- and
bottom-lines was easy enough for shareholders to accept. </span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;">Really tough to swallow in the quarter report was the increase in cash usage
to support operations.<span style="mso-spacerun: yes;"> </span>The company
dipped into the cash kitty for $21.3 million to keep the lights on during the
full fiscal year 2022.<span style="mso-spacerun: yes;"> </span>This compares to
a cash burn of $11.7 million in the previous fiscal year.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;">It is worthwhile looking beyond the headline numbers.<span style="mso-spacerun: yes;"> </span>Indeed, understanding the elements that went
into spending during the year provides insight into the company’s future.<span style="mso-spacerun: yes;"> <span></span></span></span></p><a name='more'></a> <o:p></o:p><p></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;">First, the company increased engineering and product development
activities, primarily to complete work on its proprietary Maritime Domain
Awareness (MDA) platform. <span style="mso-spacerun: yes;"> </span>The MDA system
includes radar, optical and thermal imaging camera capabilities and automatic
identification system detection.<span style="mso-spacerun: yes;"> </span>The company
has strategic partners in the program, including Greensea and Fathom5, to develop
the software and robotics components.<span style="mso-spacerun: yes;">
</span>The objective is a system sufficiently sophisticated to achieve superior
analytics and military-grade cybersecurity.<span style="mso-spacerun: yes;">
</span>The company completed testing of its MDA system just off-shore from New
Jersey.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;"></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEhS6C4RfWO8dQ9N12hfjocdZTaq31Fa8IgOBmrNyLaNe4hzxPNJ7zWIcqu1iye-3o99fnBqeVDqjusuHkYjvGHbnKqoYFbCqnYz7ESrOJar4qrL-02XNhXJHcMjfZs0cvKE7Cn9utThC_aJS9sFMwwarpvIEXYWnhtXCmrBrs1iFVIyA4InUFo" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="512" data-original-width="1024" height="213" src="https://blogger.googleusercontent.com/img/a/AVvXsEhS6C4RfWO8dQ9N12hfjocdZTaq31Fa8IgOBmrNyLaNe4hzxPNJ7zWIcqu1iye-3o99fnBqeVDqjusuHkYjvGHbnKqoYFbCqnYz7ESrOJar4qrL-02XNhXJHcMjfZs0cvKE7Cn9utThC_aJS9sFMwwarpvIEXYWnhtXCmrBrs1iFVIyA4InUFo=w426-h213" width="426" /></a></div><br />Additionally, the company acquired Marine Advanced Robotics (MAR) in November
2021, boosting operating expenses related to the transaction.<span style="mso-spacerun: yes;"> </span>Net of cash acquired the company used $4.4
million in cash to close the deal.<span style="mso-spacerun: yes;"> </span>For
its investment Ocean Power boosts its commercial line with autonomous vehicles
for maritime data services.<span style="mso-spacerun: yes;"> </span>Importantly,
MAR has established a market position and could contribute as much as $2.0
million in revenue in fiscal year 2023.<span style="mso-spacerun: yes;"> </span><o:p></o:p><p></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;">Ocean Power also added to its management team, appointing a new chief
executive officer and a new chief financial officer. <span style="mso-spacerun: yes;"> </span>There is also new blood in sales, marketing,
engineering and operations.<span style="mso-spacerun: yes;"> </span>More mouths
to feed undoubtedly put pressure on operating expenses. <span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;">The change-up in leadership may be behind a clarified corporate mission
that has become evident of late.<span style="mso-spacerun: yes;"> </span>The company
is now characterized as a provider of maritime solutions for several verticals,
not the least of which is oil and gas.<span style="mso-spacerun: yes;"> </span>It
was the oil and gas concerns that were among the first to see applications for
the company’s <i>PowerBuoy</i> system. <span style="mso-spacerun: yes;"> </span>How well autonomous service vessels and marine
robotics services fit in with the company’s proprietary <i>PowerBuoy</i> system
is yet to be demonstrated.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;">Perhaps more important than a burnished public image, is the difference
the new corporate self-identity can make for revenue streams.<span style="mso-spacerun: yes;"> </span>The company’s growth strategy is focused on
building data-as-a-service and power-as-a-service offerings.<span style="mso-spacerun: yes;"> </span>The approach means the company will see
recurring revenue streams from service subscribers rather than simply one-time
sales of equipment.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;">Investors have yet to see the merits in the changes at Ocean Power
Technologies.<span style="mso-spacerun: yes;"> </span>As a consequence, the
stock price remains depressed.<span style="mso-spacerun: yes;"> </span>For
investors with a long-term investment horizon and the tolerance for volatility,
the current price level provides a compelling entry point for a company showing
new promise.<span style="mso-spacerun: yes;"> </span>The company ended the fiscal
fourth quarter with $57.5 million in total cash on its balance sheet, providing
more than two years runtime at the recent cash usage rate.<span style="mso-spacerun: yes;"> </span>The cash hoard may be just enough to see
Ocean Power through to a time of higher revenue and maybe even the achievement of breakeven operating results.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt; mso-bidi-font-weight: bold;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><i style="mso-bidi-font-style: normal;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Neither the author of the Small Cap Strategist web
log, Crystal Equity Research nor its affiliates have a beneficial interest in
the companies mentioned herein. <o:p></o:p></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"><o:p> </o:p></span></p>Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.com1tag:blogger.com,1999:blog-23359270.post-70233455195028100512022-07-08T17:43:00.032-04:002022-07-17T17:58:26.623-04:00Inuvo Applying Artificial Intelligence to Online Marketing<div style="background: #EAF1DD; border: solid #4F6228 1.0pt; mso-element: para-border-div; padding: 1.0pt 4.0pt 1.0pt 0in;">
<p align="center" class="MsoNoSpacing" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; border: none; padding: 0in; text-align: center;"><span style="color: #4f6228; font-family: "Castellar",serif; font-size: 48.0pt; mso-bidi-font-size: 12.0pt;">PRIME SERIES<o:p></o:p></span></p>
</div>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><b><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"> </span></b></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Seemingly
all-encompassing, the Internet can feel crowded and overwhelming. People keep using it because it provides
convenience and cost savings for all sorts of consumer priorities like
education and health care. Leave aside
all those delightful puppy and kitty videos.
The fact that the Internet attracts 4.95 billion people to screens
around the world makes it first and foremost a marketing paradise. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Even more
important than a large audience is the digital platform’s unique capacity to encourage
two-way conversation. This gives the Internet
an edge over print or signage or even voice alone to capture the attention of
consumers. Chances are each and every visitor
is receptive to some message or offer and they are thrilled to give feedback. The trick is to figure out just which message
will resonate and which will get passed over.</span></p><p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13pt;"></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh2TZZgmmQfST_75GLPlMZJWE8urNz_zyqC9Kk8KJ6pALmIzTpCnDH3eTZKPEWM9Q8T03MoMu4mtsH4es2yy8hFDGuVf-IFVZZRjE9kxKNBgCokGSLUNUSl7zc5jd0BDDrIZmsAzHL6N3OkZBHEF-vBNb8E9Xf2leTn5s6rBB8MktW-W-Ccgqk/s423/Inuvo%20Logo.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="119" data-original-width="423" height="90" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh2TZZgmmQfST_75GLPlMZJWE8urNz_zyqC9Kk8KJ6pALmIzTpCnDH3eTZKPEWM9Q8T03MoMu4mtsH4es2yy8hFDGuVf-IFVZZRjE9kxKNBgCokGSLUNUSl7zc5jd0BDDrIZmsAzHL6N3OkZBHEF-vBNb8E9Xf2leTn5s6rBB8MktW-W-Ccgqk/s320/Inuvo%20Logo.png" width="320" /></a></div>Advertisers can get
help from Inuvo, Inc. The company brings a new level of sophistication to
digital advertising with innovative technology that provides critical market
information to users without violating the privacy of consumers.<span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">Its flagship product </span><i style="font-family: Roboto; font-size: 13pt;">IntentKey</i><span style="font-family: Roboto; font-size: 13pt;"> is an
artificial intelligence-driven application to recognize consumer intent.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">It has application for broad array of clients,
including media and creative agencies, brand owners, and search engines.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">Disney, Toyota Motors, Microsoft, 23andMe,
and Progressive are among numerous leading names that have adopted </span><i style="font-family: Roboto; font-size: 13pt;">IntentKey</i><span style="font-family: Roboto; font-size: 13pt;">.</span><span style="font-family: Roboto; font-size: 13pt;"> </span><p></p><p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13pt;"><i>It is timely for investors to find out why.<span></span></i></span></p><a name='more'></a><p></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><b><span style="font-family: Roboto; font-size: 13pt;">Market Developments:</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">‘cookies’ crumble</span></b></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">One of the most
popular methods to deliver targeted messages to Internet visitors is the deployment
of ‘cookies’, a text file with bits of data identifying a computer as the user visits
Internet sites. The text files are saved
in the web browser to keep track of use over time. Information in the text files allow websites to
recognize users and recall their individual login information. Cookies are used to customize advertising and
target particular consumers who have demonstrated a predisposition for a
particular product or service. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhsCyILQGvYU1N9mNtLN7asYXCx9pUcazYcoTcLZueRBdUdvInStz-BGbWGvnkKB1-PowYe09XRVOWkfDEMVEoyRl603xQu07qGeyNRfh_2-iltKr_ia216mHm5DksZlMdpfvNejig21F5YA3NTPWi8_5qIn5QmCCZmli2_4qCnigAtDNBBogo/s161/Google%20Cookies.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="90" data-original-width="161" height="116" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhsCyILQGvYU1N9mNtLN7asYXCx9pUcazYcoTcLZueRBdUdvInStz-BGbWGvnkKB1-PowYe09XRVOWkfDEMVEoyRl603xQu07qGeyNRfh_2-iltKr_ia216mHm5DksZlMdpfvNejig21F5YA3NTPWi8_5qIn5QmCCZmli2_4qCnigAtDNBBogo/w208-h116/Google%20Cookies.jpg" width="208" /></a></div>Unfortunately,
consumers have pushed back on the invasive nature of cookies and have clamored
for more privacy. As a consequence, owners
of Internet browsers are turning off cookies.
Apple’s Safari browser has blocked cookies for years. Google announced discontinuation of third-party
cookies in its web browser Chrome by the end of 2023. <o:p></o:p><p></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Importantly, the
discontinuation of ‘cookies’ does not mean the end of tracking Internet interactions. There are other methods, such as local
storage or other technologies that save data on a user’s device from the
browser they use. For example, beginning
in 2019, Facebook began bypassing third-party ‘cookies’ by using a first-party
cookie combined with a pixel tracker to surveil European Internet users. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Around the world
various jurisdictions are attempting to protect Internet users with data protection
legislation. The result has been a
patchwork of laws, but the imperative appears to be widespread. A total of 137 out of 194 countries have put
into place legislation to secure protection of data and privacy. In the U.S., five states - California, Colorado, Connecticut, Utah and
Virginia - have enacted consumer data privacy legislation.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Data privacy is
clearly a high priority around the world and some technologies to gather consumer
information may not survive. Consequently, Internet browser owners and others
involved in Internet messaging are keenly interested in new technologies that keep
their platforms viable and effective for marketing messages. It is a market worth protecting. According to Statistica, in 2021, worldwide digital
advertising totaled $521 billion in value, and is estimated to reach $869 billion
by 2026. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><b><span style="font-family: Roboto; font-size: 13pt;">Technology: </span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">proprietary solutions protect consumer privacy</span></b></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Inuvo’s proprietary
technology uses artificial intelligence to analyze Internet activity, focusing on
possible motivations behind browser searches or content consumption. It is
a form of machine learning that scrutinizes visitor interactions with Internet
content to predict consumer intent. The technology
is capable of responding to over 200,000 events per second. Importantly, the application does not
identify any one consumer, store their data or track their Internet usage
history. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhnHDY5bjO9y_aq2P9E16tzXh8lguCfeBA0X9gTOAYs5KZMvsL0QOCJqwrAQHmlYUACWIxc-yuFpi3ICVHVKUzkkn5_B4uzZFgiKoq0kyhWEePyaP8UufBthm9KEqAXkpv3LkXczcKlefuZiSq8WiZ7xrnr_GWkADiv6NVlUvmVjWa_af_zHz0/s287/Intent%20Key.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="175" data-original-width="287" height="175" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhnHDY5bjO9y_aq2P9E16tzXh8lguCfeBA0X9gTOAYs5KZMvsL0QOCJqwrAQHmlYUACWIxc-yuFpi3ICVHVKUzkkn5_B4uzZFgiKoq0kyhWEePyaP8UufBthm9KEqAXkpv3LkXczcKlefuZiSq8WiZ7xrnr_GWkADiv6NVlUvmVjWa_af_zHz0/s1600/Intent%20Key.jpg" width="287" /></a></div>The technology
is packaged in two products - <i>IntentKey</i> and <i>ValidClick</i>. <o:p></o:p><p></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo2; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 13.0pt; line-height: 125%; mso-bidi-font-family: Symbol; mso-bidi-font-size: 14.0pt; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;">
</span></span><!--[endif]--><i><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">ValidClick</span></i><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"> is a marketing and advertising service for brand owners or consolidators
of advertising demand such as search or social advertising channels. Clients can use the information in <i>ValidClick</i>
to more effectively place advertising messages on the right websites. Yahoo!
And Google are <i>ValidClick</i> clients on multi-year contracts, who resell
each click on the service to their advertisers.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l1 level1 lfo2; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 13.0pt; line-height: 125%; mso-bidi-font-family: Symbol; mso-bidi-font-size: 14.0pt; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;">
</span></span><!--[endif]--><i><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">IntentKey</span></i><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"> helps advertisers reach particular audiences on various devices,
including mobile, tablet, desktop, smart-tv or game consoles. Using <i>IntentKey’s</i> intelligence on
consumer intent, advertisers can get better return on investment for its ad
spend. The platform is embellished with advertising inventory data bought from Xandr,
Inc., the advertising and analytics subsidiary of Microsoft. <i>IntentKey</i> is available to clients
either as software-as-a-service or as a managed service. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><b><span style="font-family: Roboto; font-size: 13pt;">Competition:</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">patented technology holds off contenders</span></b></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">The company’s technology
is protected by seventeen issued patents and Inuvo has another eight
applications pending. This patent shield
is valuable given the attractiveness of the market place to competitors. That said, it is more likely that Inuvo would
experience competition from more established players than new technology
developers. Indeed, Inuvo management
recognizes several possible contenders for their clients advertising analytics budget. For example, data suppliers or aggregators
are alternative consumer intelligence sources for Inuvo’s clients. Also, direct marketing platforms and media
planners can simplify placement of online advertising. </span></p><p class="MsoNormal" style="margin-bottom: 10.0pt;"><b><span style="font-family: Roboto; font-size: 13pt;">Market Penetration:</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">multi-prong strategy</span></b></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Likely with that
much contention for its clients’ budget in mind, Inuvo has a multi-prong approach
to reach prospective clients. The company’s
direct sales team targets creative and media agencies as well as brand owners in
crafting tailored campaigns that reach goals.
The company also relies on integrations with various channels with advertising
inventory. Prospective clients fall across
a variety of obvious sectors, such as consumer packaged goods, electronics, auto,
and financial services. Some prospects
may be less obvious such as non-profits or educational organizations.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Inuvo takes a
strong message of high return on ad spend to its prospects. The company is focused
on players in the ‘open web’ that command about $200 billion in advertising
spend. As much as 99% of this slice of
the pie is spent by companies that currently use identity-based technology and
may be ready for an alternative approach such as <i>IntentKey</i>. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><b><span style="font-family: Roboto; font-size: 13pt;">Performance:</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">ramp to profitability</span></b></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Inuvo has achieved
commendable sales growth in the last three years. The company reported a 34% year-over-year increase
in revenue in 2021, a nice jump at the topline after a couple of years of
topline shrinkage. Sales totaled $59.8
million in 2021, composed of 49%<i>ValueClick</i> sales and 51% <i>IntentKey</i>
subscriptions. The company earned a 73.4%
gross profit margin in the years, a high margin as might be expected of a software
developer. The gross profit margin declined
from 81.4% in 2020, on a shift in sales mix. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Operating
expenses in the year 2021, totaled $51.7 million as the company ramped up its marketing
effort. Marketing expenses increased
20.7% year-over-year to $33.1 million. The
category climbed to 64% of total operating costs in the year. Despite the increase in operating spend, the
company was able to achieve a lower reported operating loss of negative $7.8
million. This compares to $8.0 million
in the previous year.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Investors should
probably scrutinize Inuvo’s cash balance and cash generating potential. In 2021, the company used $5.3 million in cash
resources to support operations. Most of
the cash was used to pay salaries and marketing expenses. Working capital investments also required
cash. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">To boost cash resources,
in the year 2021, Inuvo raised $13.1 million in new capital through the sale of
common stock. At the end of the year
cash and equivalents totaled $10.5 million.
Marketable securities represented another $1.9 million in financial
resources. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">The cash kitty
has come in handy. In the first months
of 2022, the company continued to experience fast growth. Sales in the first
quarter ending March 2022, were $18.6 million, representing 75.5% year-over-year
growth. Operations required $3.6 million
in cash in the quarter, soaking up 29% of cash and marketable securities that
had been available at the beginning of the quarter. Again, operating expenses and working capital
investments were the primary uses of cash. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">In a recent
interview, CEO Richard Howe and CFO Wally Ruiz expressed confidence in reaching
positive cash flow and then operating profitability. He pointed to recent successes winning new
customers that validates the company’s marketing investment. Additionally, the company’s data center can process
up to two million transactions per second, providing plenty of room to scale up
without any more significant investment in infrastructure. </span></p><p class="MsoNormal" style="margin-bottom: 10.0pt;"><b><span style="font-family: Roboto; font-size: 13pt;">Conclusion:</span><span style="font-family: Roboto; font-size: 13pt;"> </span><span style="font-family: Roboto; font-size: 13pt;">undervalued</span></b></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Proven
technology, large and growing market and big-name customers help populate the
Inuvo story with all the right players.
Growing sales prove strategies to capture of market share are working. However, the plot is really made interesting
by a seemingly undervalued stock, at least compared to peer groups. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l2 level1 lfo3; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 13.0pt; line-height: 125%; mso-bidi-font-family: Symbol; mso-bidi-font-size: 14.0pt; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">INUV is trading at 0.86 times sales
and 1.88 times book value. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l2 level1 lfo3; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 13.0pt; line-height: 125%; mso-bidi-font-family: Symbol; mso-bidi-font-size: 14.0pt; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">The advertising sector is trading
at 1.52 times sales while information services trade at 8.21 times sales. A group of Internet software companies
command a 16.3 multiple of sales. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt; margin-left: .5in; margin-right: 0in; margin-top: 0in; mso-list: l2 level1 lfo3; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 13.0pt; line-height: 125%; mso-bidi-font-family: Symbol; mso-bidi-font-size: 14.0pt; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">From the perspective of book value,
advertising commands a 4.1 multiple time book value, information services 7.64 and
Internet software 10.50 times.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Unlike the
advertising and information services groups, which are composed of seasoned and
highly profitable members, the Internet software group has an average negative 2.3%
operating margin and a negative 10.4% net margin. Thus, we would expect INUV to trade at lower
multiples than the advertising and information services groups, the peer groups
comparison seems to merit at a significantly higher multiples than recent
levels. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">What catalyst
might deliver an adjustment to INUV valuation?
Upcoming quarter reports should keep shining a light on successful market
penetration. Indeed, strong year-over-year
comparisons are likely possible in each of the next few quarter reports and
that is likely to attract new interest in the shares. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"> </span></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><i><span style="color: #4f6228; font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Neither the author of the Small Cap
Strategist web log, Crystal Equity Research nor its affiliates have a
beneficial interest in the companies mentioned herein. <o:p></o:p></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><i><span style="color: #4f6228; font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;">Underwriters of the Prime series may
have a beneficial interest in, serve as agents of, or act as advisors to the
companies mentioned herein.<o:p></o:p></span></i></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><i><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"> </span></i></p>
<p class="MsoNormal" style="margin-bottom: 10.0pt;"><span style="font-family: Roboto; font-size: 13.0pt; line-height: 125%; mso-bidi-font-size: 14.0pt;"> </span></p>
<p><span style="font-family: Roboto; font-size: 13pt;"> </span> </p>Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.com0tag:blogger.com,1999:blog-23359270.post-33069950508996360652022-07-01T09:01:00.099-04:002022-07-02T21:37:04.336-04:00Celebration of Independence<p><br /></p><p style="text-align: center;"><span style="background-color: white; color: #555555; font-family: "Source Sans Pro", sans-serif; font-size: 16px; text-align: start;"></span></p><div class="separator" style="clear: both; text-align: left;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEhS4GHHvYqqCz1OFP6uoV56JQdS8v_mTEiV8Z0x_QwEyrLGmV7CHZNyevugUTVUw1co7hexlgAY5tBNP2KYct4HD1IwylZWFGzKiA8lCvblZbbKZfTwPrRpwthN_ad2iThkZLjzYfQIT7hiEKQkg8CCc2Wa3Ksog5G1yeHKmoaH1GMWtSTMYSc" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img alt="" data-original-height="68" data-original-width="126" height="173" src="https://blogger.googleusercontent.com/img/a/AVvXsEhS4GHHvYqqCz1OFP6uoV56JQdS8v_mTEiV8Z0x_QwEyrLGmV7CHZNyevugUTVUw1co7hexlgAY5tBNP2KYct4HD1IwylZWFGzKiA8lCvblZbbKZfTwPrRpwthN_ad2iThkZLjzYfQIT7hiEKQkg8CCc2Wa3Ksog5G1yeHKmoaH1GMWtSTMYSc" width="320" /></a></div>"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness."</div><p></p><p style="text-align: center;"><span style="background-color: white; color: #555555; font-family: "Source Sans Pro", sans-serif; font-size: 16px; text-align: start;"><br /></span></p><p style="text-align: center;"><span style="color: #555555; font-family: Source Sans Pro, sans-serif;"><span style="background-color: white;">Declaration of Independence, July 4, 1776</span></span></p><p style="text-align: center;"><span style="color: #555555; font-family: Source Sans Pro, sans-serif;"><span style="background-color: white;"><br /></span></span></p><p style="text-align: center;"><span style="color: #555555; font-family: Source Sans Pro, sans-serif;"><span style="background-color: white;">[Except children, who have no expectation of life in their classrooms when men can make lots of money selling guns to other men who need a fetish to feel good about themselves.]</span></span></p><p style="text-align: center;"><span style="background-color: white; color: #555555; font-family: "Source Sans Pro", sans-serif;">[Except women, who have no expectation of liberty to safeguard the bodies given them by the Creator when religious and political zealots want to dominate the world to their own benefit.]</span></p><p style="text-align: center;"><span style="background-color: white; color: #555555; font-family: "Source Sans Pro", sans-serif;">[Except people of color, who have no expectation to pursue happiness when those of weak character need racial supremacy to succeed in the complex and diverse world given to us by the Creator.]</span></p><p style="text-align: center;"><span style="background-color: white; color: #555555; font-family: "Source Sans Pro", sans-serif;">[Except people living with bodies given by the Creator that do not fit a binary gender, who have no expectation of happiness, when some in our society prefer ignorance over intelligence and punishment over compassion.]</span></p><p style="text-align: center;"><span style="background-color: white; color: #555555; font-family: "Source Sans Pro", sans-serif;"><br /></span></p><p style="text-align: center;"><span style="background-color: white; color: #555555; font-family: "Source Sans Pro", sans-serif;"></span></p><div class="separator" style="clear: both; text-align: center;"><br /></div><br /><br /><p></p><p style="text-align: right;"><span style="color: #555555; font-family: Source Sans Pro, sans-serif;"><span style="background-color: white;"><br /></span></span></p>Debra Fiakashttp://www.blogger.com/profile/14553347927569140292noreply@blogger.com0